Putnam
Global
Growth
Fund
SEMIANNUAL REPORT
April 30, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "The goal of Putnam Global Growth Fund is to invest in high-quality,
large-cap growth companies in developed markets. Our process
emphasizes research-driven stock selection and is bottom-up in nature.
Sector weights tend to be a byproduct of company selections by the
portfolio management team. Of course, country allocation and
diversification are important parts of the process and help the managers
achieve the necessary balance between risk and returns."
-- Robert Swift, manager,
Putnam Global Growth Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
21 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
As the world moves steadily toward a truly global economy, technology leads
the way. Advances in telecommunications, personal computers, and video will
soon give nearly everyone on the earth access to one another through the
Internet. It is not surprising, therefore, that Putnam Global Growth Fund is
heavily invested in the technologies that will make such communications
possible.
Increasingly, people will be taking advantage of opportunities to invest in
growth-oriented companies all over the world -- the types of companies your
fund has been focusing on and investing in for more than two decades. In the
following report about the fund's performance during the first half of fiscal
1998, the management team discusses the strategies employed in the current
market and economic environment in the United States and abroad and looks at
prospects for the months ahead.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
June 17, 1998
Report from the Fund Managers
Robert Swift
Kelly A. Morgan
Lisa Svensson
Thomas R. Haslett
Michael Arends
As managers of Putnam Global Growth Fund, we utilize an intensive,
research-driven process in evaluating the growth characteristics of individual
companies around the world. Sometimes, however, broad-based events can present
temporary hurdles -- as was the case with Asia's financial and economic
difficulties in the second half of 1997.
The negative repercussions of the Asian crisis on many of the growth-oriented
companies we favored was the most influential factor in the first few months
of the fund's fiscal period. However, by continuing to emphasize high-quality,
large-capitalization growth companies considered to be industry leaders, we
are pleased to report solid relative performance for the semiannual period. As
of April 30, 1998, the fund had a total return of 20.01% at net asset value
(13.12% at public offering price) compared with the 18.21% gain of the Morgan
Stanley Capital International All Country World Free Index. For performance of
other share classes and over longer periods, please turn to page 8 of this
report.
* U.S., EUROPEAN TECHNOLOGY COMPANIES STILL KEY FOCUS
The liberalization of markets and the process of globalization have created a
worldwide demand for technology that would have been inconceivable just a
short time ago. With the rise of the Internet, the previously distinct areas
of voice, data, and video are converging. Additionally the continuous creation
of more efficient and less expensive technology enhances the rapid growth of
the various industries that make up the high-tech category. For example,
Internet protocol (IP) networks, which can carry voice transmissions over the
Internet, are slated to handle 25% of international telephone traffic by 2003,
according to a May 6, 1998, information technology survey by the Financial
Times. IP technology is also expected to foster competition and innovation in
traditional telecommunications, telecommunications equipment, data
communications technologies, and networking equipment.
Therefore, your fund's focus on growth means that it was -- and continues to
be -- heavily invested in technology. Consequently, as concerns about Asian
demand clouded earnings expectations for technology companies, your fund's
performance was, inevitably, affected. However, in calendar 1998, our patience
has paid off. Many segments of technology bounced back, as investors began to
recognize the inherent strengths of some technology-related firms.
Additionally, in several cases, the weakness in the first few months of the
fund's reporting period gave us a chance to add to positions in companies we
believe have significant growth prospects.
We sought to take advantage of the worldwide growth of cellular communications
and equipment, software, and personal computers. We believe Nokia of Finland,
a long-time leader in telecommunications equipment, should benefit from the
increased cellular use at the expense of traditional wire-line service as will
cellular operators Vodafone of the United Kingdom and Mannesmann AG of
Germany. We also targeted companies related to the cellular phenomenon such as
U.S. firm Linear Technology, which designs and manufactures analog circuits
used in cellular communications. In software, we held SAP of Germany, a
leading maker of enterprise software for business, and we added a position in
Veritas, which is one of the largest memory management software companies.
Finally, as the personal computer market has spread through so many segments
of society, we've added Gateway 2000, Dell Computer, and Hewlett Packard.
While these holdings, along with others discussed in this report, were viewed
favorably at the end of the fiscal period, all are subject to review and
adjustment in accordance with the fund's investment strategy and may vary in
the future.
[GRAPHIC OMITTED: HORIZONTAL BAR CHART OF COUNTRY ALLOCATION]
COUNTRY ALLOCATION*
United States 46.1%
United Kingdom 8.9%
France 6.4%
Japan 6.0%
Germany 4.7%
Footnote reads:
* Based on net assets as of 4/30/98. Holdings will vary over time.
* PHARMACEUTICALS REMAIN IMPORTANT AREA FOR GROWTH
The pharmaceutical industry had somewhat of a bumpy ride during the period.
Pharmaceutical stocks were initially lifted, as stronger earnings expectations
and the merger announcement of U.K. companies SmithKline Beecham and Glaxo
Wellcome were viewed positively by the market. However, after the failure of
the merger, the stocks of U.S. and U.K. drug companies underperformed their
respective markets.
Despite the variation in the companies' stock prices, we targeted firms that
we believe have solid product portfolios, fill niche areas in the market, and
offer strong capabilities in marketing new drugs. Some examples included
SmithKline Beecham as well as the British firm Zeneca, which has an extensive
cancer-related product line that should aid the growth of its business. The
fund also owned Elan, an Irish pharmaceutical company that -- through its
presence in several key product areas -- should be able to sustain the
double-digit earnings growth it has demonstrated in the recent past.
* MANAGEMENT STILL WARY OF JAPAN
Japan's economy has not improved during the past six months. It is expected to
show little or no growth this year and the government does not appear willing
to accept the measures necessary to resuscitate economic growth. We continue
to hold a low position in Japanese stocks relative to the fund's benchmark
index.
As earnings continued to decline during the period, we began to sell some of
the multinational exporting firms previously held by the fund. However, we did
add to the fund's technology holdings. Nippon Telephone & Telegraph has grown
rapidly as a result of its strong cellular subsidiary. The company has also
reduced capital expenditures and cut employment costs through early retirement
programs. NEC Corporation -- a diversified company with interests in
semiconductors, personal computers, and telecommunications equipment -- should
also benefit from the increasing world demand for technology.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
General Electric Co. (United States)
Electronics and electrical equipment
Nestle S.A. (Switzerland)
Food and beverages
Telecom Italia SPA (Italy)
Insurance and finance
Merck & Co., Inc. (United States)
Pharmaceuticals
Pfizer, Inc. (United States)
Pharmaceuticals
SmithKline Beecham PLC ADR (United Kingdom)
Pharmaceuticals
Koninklijke Ahold N.V. (Netherlands)
Retail
Telfonica de Espana (Spain)
Telecommunications
Vodafone Group PLC (United Kingdom)
Telecommunications
Microsoft (United States)
Computer services and software
These holdings represent 15.4% of the fund's net assets as of 4/30/98.
Portfolio holdings will vary over time.
* OUTLOOK AND PROSPECTS FOR GROWTH
With interest rates around the world fairly low and liquidity high, we are
optimistic for the near future. Additionally, given the developments in many
of the industries we targeted, there's no reason why many of the companies we
favored cannot sustain the strong growth rates they have established.
Nevertheless, we will continue to monitor each individual holding and
reallocate our resources as either stocks meet our price targets or their
growth prospects change.
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 4/30/98, there is no guarantee the fund will continue to hold
these securities in the future.
International investing involves certain risks, such as currency fluctuations,
economic instability, and political developments, not present with domestic
investments.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
Global Growth Fund is designed for investors seeking capital appreciation
through a globally diversified equity portfolio.
TOTAL RETURN FOR PERIODS ENDED 4/30/98
Class A Class B Class M
(inception date) (9/1/67) (4/27/92) (3/1/95)
NAV POP NAV CDSC NAV POP
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6 months 20.01% 13.12% 19.54% 14.68% 19.70% 15.53%
- ------------------------------------------------------------------------------
1 year 28.23 20.81 27.20 22.20 27.53 23.01
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5 years 111.82 99.60 104.04 102.04 106.20 99.07
Annual average 16.20 14.82 15.33 15.10 15.57 14.76
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10 years 220.20 201.79 195.34 195.34 202.87 192.27
Annual average 12.34 11.68 11.44 11.44 11.72 11.32
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Annual average
(life of fund) 11.04 10.83 10.00 10.00 10.28 10.15
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 4/30/98
MSCI
MSCI EAFE All Country World* S&P 500 Consumer
Index* Free Index Index Price Index
- ------------------------------------------------------------------------------
6 months 15.44% 18.21% 22.49% 0.56%
- ------------------------------------------------------------------------------
1 year 18.91 26.77 41.07 1.44
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5 years 61.70 106.42 184.36 12.85
Annual average 10.09 15.60 23.25 2.45
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10 years 81.26 189.40 466.16 38.77
Annual average 6.13 11.21 18.93 3.33
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Life of fund -- -- -- 385.07
Annual average -- -- -- 5.28
- ------------------------------------------------------------------------------
Returns for class A and class M shares reflect the current maximum initial
sales charges of 5.75% and 3.50%, respectively. Class B share returns for
the 1-, 5-, and 10-year (where available) and life-of-fund periods reflect
the applicable contingent deferred sales charge (CDSC), which is 5% in the
first year, declines to 1% in the sixth year, and is eliminated
thereafter. Returns shown for class B and class M shares for periods prior
to their inception are derived from the historical performance of class A
shares, adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and, in the case of class B and class M
shares, the higher operating expenses applicable to such shares. All
returns assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares when redeemed
may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
6 months ended ended 4/30/98
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
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Income $0.255 $0.169 $0.204
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Capital gains
- ------------------------------------------------------------------------------
Long-term 1.417 1.417 1.417
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Short-term 0.547 0.547 0.547
- ------------------------------------------------------------------------------
Total $2.219 $2.133 $2.168
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Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
10/31/97 $12.00 $12.73 $11.62 $11.90 $12.33
- ------------------------------------------------------------------------------
4/30/98 11.69 12.40 11.29 11.60 12.02
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 3/31/98
(most recent calendar quarter)
Class A Class B Class M
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 8.77% 2.54% 8.36% 3.96% 8.51% 4.69%
- ------------------------------------------------------------------------------
1 year 29.16 21.70 28.24 23.24 28.55 24.10
- ------------------------------------------------------------------------------
5 years 113.05 100.71 105.05 103.05 107.67 100.32
Annual average 16.33 14.95 15.44 15.22 15.74 14.91
- ------------------------------------------------------------------------------
10 years 220.78 202.34 195.70 195.70 203.42 192.80
Annual average 12.36 11.70 11.45 11.45 11.74 11.34
- ------------------------------------------------------------------------------
Life of class
Annual average 11.01 10.79 9.96 9.96 10.24 10.11
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future performance, and
will differ for each share class. Investment returns and principal value will
fluctuate so that an investor's shares, when sold, may be worth more or less
than their original cost. See first page of performance section for performance
calculation method.
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class 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
Standard & Poor's 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) EAFE Index* is an unmanaged
list of equity securities from Europe, Australia and the Far East, with
all values expressed in U.S. dollars.
Morgan Stanley Capital International (MSCI) All-Country Free Index* is an
unmanaged list of global equity securities, with all values expressed in
U.S. dollars.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
* Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities in
the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
Portfolio of investments owned
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (98.8%) (a)
NUMBER OF SHARES VALUE
Argentina (0.2%)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
203,090 Banco Frances del Rio de la Plata S.A. ADR $ 1,970,170
305,000 Cia Naviera Perez Co. 1,833,233
59,000 Inversiones Y Representaciones S.A. GDR 2,293,625
28,900 Telefonica de Argentina S.A. ADR 1,114,456
110,000 YPF S.A. ADR 3,836,250
--------------
11,047,734
Brazil (0.9%)
- -------------------------------------------------------------------------------------------------------------
514,078 Banco Bradesco S.A. BRC 4,720,660
150,000 Benpres Holdings Corp. GDR (NON) 510,000
123,200 Brazil Realty S.A. 144A GDR 2,895,200
2,609,400 Centrais Electricas de Santa Catarina S.A. 3,058,069
267,500 Companhia Brasileira de Distribuicao Grupo
Pao de Acucar ADR (NON) 7,122,188
4,400 Companhia Cimento Portland Itau 1,000,525
112,500 Companhia Energetica de Minas Gerais (Cemig)
144A ADS 5,428,125
7,300 Companhia de Saneamento Basico do
Estado de Sao Paulo 1,659,962
201,000 Companhia Vale do Rio Doce ADR 4,698,375
67,600 Compania Siderurgica Nacional 2,116,565
60,500 Empresa Bras Aeronautica 1,058,247
105,000 Gerdau S.A. 2,047,840
251,500 Lojas Americanas S.A. (NON) 2,001,618
169,300 Souza Cruz S.A. 1,384,428
35,800 Telebras Co. ADR 4,360,888
--------------
44,062,690
Canada (2.2%)
- -------------------------------------------------------------------------------------------------------------
5,834 Bank of Nova Scotia 160,073
77,100 Bell Canada International, Inc. (NON) 1,734,750
1,082,400 Bombardier, Inc. 29,207,018
791,033 Northern Telecom Ltd. 48,136,582
679,700 Toronto-Dominion Bank 31,027,200
--------------
110,265,623
Chile (--%)
- -------------------------------------------------------------------------------------------------------------
109,200 Distribucion y Servicio D&S S.A. ADR (NON) 1,924,650
China (0.1%)
- -------------------------------------------------------------------------------------------------------------
1,200,000 Guangdong Kelon Elec Holding 1,231,286
1,400,000 Qingling Motors Co. (NON) 605,318
2,000,000 Yanzhou Coal Mining Co. Ltd. (NON) 522,716
--------------
2,359,320
Finland (1.0%)
- -------------------------------------------------------------------------------------------------------------
757,400 Oy Nokia AB Class A 50,903,155
France (6.4%)
- -------------------------------------------------------------------------------------------------------------
242,188 Cap Gemini S.A. 31,438,349
302,900 Compagnie Generale des Eaux 56,285,581
109,937 L'OREAL 52,442,315
122,080 Promodes (NON) 58,782,641
314,300 SGS-Thomson Microelectronics ADR (NON) 26,558,350
429,800 Total S.A. Class B 51,077,370
476,904 Valeo S.A. 47,401,079
--------------
323,985,685
Germany (4.7%)
- -------------------------------------------------------------------------------------------------------------
47,640 Adidas AG 7,893,567
215,900 Bay Vereinsbank 16,328,258
36,653 Bayerische Motoren Werke (BMW) AG 40,419,349
628,611 Deutsche Bank AG 48,349,306
78,415 Mannesmann AG 62,190,454
132,740 SAP AG 62,839,878
--------------
238,020,812
Greece (0.2%)
- -------------------------------------------------------------------------------------------------------------
17,800 Alpha Credit Bank 1,878,285
14,678 Bank Of Greece, S.A. 2,583,279
20,000 Commercial Bank Of Greece, S.A. 1,258,710
70,900 Hellenic Telecommunication Organization S.A. 2,030,804
188,300 Hellenic Telecommunicaiton Organization S.A. GDR 2,694,742
3,910 Minoan Lines (NON) 38,576
--------------
10,484,396
Hong Kong (1.4%)
- -------------------------------------------------------------------------------------------------------------
500,000 Asia Satellite Telecommunications Holdings Ltd. 919,592
436,000 Cheung Kong Infrastructure Holdings 1,105,756
500,000 China Telecom Ltd. (NON) 948,632
360,000 Dao Heng Bank Group Ltd. 1,064,017
5,495,000 Henderson Land Development Co. Ltd. (R) 24,538,850
7,725,000 National Mutual Asia Ltd. 6,181,599
340,400 New World Infrastructure Ltd. (NON) 731,500
800,000 Ng Fung Hong Ltd. 722,767
230,000 Shanghai Industrial Holdings Ltd. 788,139
302,000 Smartone Telecommunications (NON) 793,198
5,078,000 Sun Hung Kai Properties Ltd. 30,148,168
--------------
67,942,218
Hungary (--%)
- -------------------------------------------------------------------------------------------------------------
82,300 MOL Magyar Olaj-es 144A GDR 2,501,920
India (0.3%)
- -------------------------------------------------------------------------------------------------------------
200,000 Bharat Heavy Electricals Ltd. (BHEL) 1,980,347
55,000 BSES Ltd. GDR (NON) 903,375
177,000 Gujarat Ambuja Cements Ltd. GDR (NON) 1,239,000
55,000 Hindalco Industries 1,046,233
108,000 Hindustan Petroleum Corp. Ltd. 1,098,639
47,000 Indian Hotels, Co. Ltd. GDR 693,250
150,000 Larsen & Toubro Ltd. 944,822
321,000 Mahanagar Telephone Nigam Ltd. 2,038,095
69,100 Ranbaxy Laboratories Ltd. 1,155,149
102,000 State Bank of India 740,136
24,000 State Bank of India GDR 456,000
156,000 Tata Engineering and Locomotive Co., Ltd. 1,091,882
--------------
13,386,928
Indonesia (--%)
- -------------------------------------------------------------------------------------------------------------
2,300,000 PT Indah Kiat Pulp & Paper Corp. 636,497
500,000 PT Semen Gresik (NON) 339,633
--------------
976,130
Ireland (1.2%)
- -------------------------------------------------------------------------------------------------------------
977,200 Elan Corp. PLC ADR (NON) 60,708,550
Israel (0.2%)
- -------------------------------------------------------------------------------------------------------------
1,543,000 Bank Leumi Le-Israel 2,819,560
9,100 Formula Systems Ltd. (NON) 351,514
10,150 Koor Industries Ltd. 1,284,046
66,700 Koor Industries Ltd. ADR 1,692,513
62,200 Supersol Ltd. ADR 995,200
662,100 Super Sol Ltd. (NON) 2,086,848
74,800 Tadiran Ltd. 2,911,607
--------------
12,141,288
Italy (3.8%)
- -------------------------------------------------------------------------------------------------------------
6,024,000 Credito Italiano SPA 31,667,514
4,365,300 La Rinascente SPA 43,751,383
10,149,800 Telecom Italia SPA 75,936,871
7,085,700 Telecom Italia Mobile SPA 40,409,499
--------------
191,765,267
Japan (6.0%)
- -------------------------------------------------------------------------------------------------------------
363,900 Acom Co. Ltd. 19,139,650
298,900 Aiful Corp. 19,701,749
36,500 Keyence Corp 4,894,128
3,914,000 NEC Corp. 43,881,539
6,383 Nippon Telegraph and Telephone Corp. 55,713,135
66,600 Shohkoh Fund & Co., Ltd. 21,097,504
433,000 Sony Corp. 35,871,536
1,299,000 Takeda Chemical Industries 36,946,705
124,300 Takefuji Corp. 6,500,259
283,000 Takefuji Corp. 144A 14,799,464
1,169,600 Tokyo Electron Ltd. 45,763,103
--------------
304,308,772
Lebanon (--%)
- -------------------------------------------------------------------------------------------------------------
107,200 Commerce Bank of Lebanon 144A GDR (NON) 1,859,920
Malaysia (0.1%)
- -------------------------------------------------------------------------------------------------------------
770,000 Berjaya Sports Toto Berhad 1,829,396
456,000 IJM Copr. Berhad 219,125
425,000 Public Bank Berhad 176,846
431,000 Telekom Malaysia 1,295,893
276,000 Timah Langat Berhad 463,087
--------------
3,984,347
Mexico (1.5%)
- -------------------------------------------------------------------------------------------------------------
369,100 Axa S.A. (NON) 43,311,660
300,000 Cemex S.A. de C.V. 1,499,116
672,000 Cemex S.A. de C.V. Class B (NON) 4,039,128
1,388,200 Corporacion Moctezuma, S.A. de C.V. 1,995,998
142,200 Grupo Accion, S.A. de C.V. 144A ADR (NON) 1,386,450
994,000 Grupo Financiero Banamex Accival, S.A. de C.V. Class B (NON) 3,104,420
188,600 Grupo Imsa S.A. de C.V. ADR (NON) 3,595,188
86,000 Grupo Televisa S.A.GDR 3,526,000
627,400 Kimberly-Clark de Mexico, S.A. de C.V. Class A 3,079,695
108,000 Madeco S. A. ADR 1,728,000
67,600 Panamerican Beverages, Inc. Class A 2,695,550
54,700 Telefonos de Mexico S.A. ADR Class L 3,097,388
--------------
73,058,593
Netherlands (3.9%)
- -------------------------------------------------------------------------------------------------------------
268,300 Aegon N.V. 34,775,205
265,780 ASM Lithography Holding N.V. (NON) 24,114,006
708,564 Getronics Electric N.V. 31,337,500
539,419 Internationale Nederlanden Groep 35,037,951
2,289,700 Koninklijke Ahold N.V. 71,361,977
--------------
196,626,639
Pakistan (--%)
- -------------------------------------------------------------------------------------------------------------
6 Pakistan State Oil 30
Philippines (0.1%)
- -------------------------------------------------------------------------------------------------------------
4,342,560 Ayala Land, Inc. Class B 1,703,495
12,193,300 Belle Corp. (NON) 534,501
60,000 Benpres Holdings Corp. GDR (NON) 215,190
253,300 Cosmos Bottling Corp. 32,806
10,293,300 International Container Terminal Services, Inc. 1,358,767
25,800 Philippine Long Distance ADR 690,785
38,500 Philippine Long Distance Telephone Co. ADR 1,039,500
6,340,000 SM Prime Holdings, Inc. 1,136,936
--------------
6,711,980
Portugal (2.0%)
- -------------------------------------------------------------------------------------------------------------
1,281,756 Banco Comercial Portugues, S.A. 44,911,982
74,000 Colep-Companhia Portuguesa de Embalagens (NON) 1,035,317
82,600 Investec Consultadoria International S.A. (NON) 3,410,815
24,500 Telecel-Comunicacaoes Pessoais, S.A. ADR (NON) 4,361,000
263,500 Telecel-Comunicacaoes Pessoais, S.A. (NON) 47,245,347
--------------
100,964,461
Russia (0.3%)
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148,000 Fleming Russia Securities Fund Ltd. (NON) 2,627,000
37,000 Lukoil Holding ADR 2,516,000
39,000 Mosenergo 144A ADR 1,384,500
226,500 Tatneft ADR 4,388,438
8,657,000 Unified Energy Systems 2,943,380
--------------
13,859,318
South Africa (0.3%)
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381,000 ABSA Group Ltd. 3,297,478
76,100 Energy Africa Ltd. 144A (NON) 1,826,400
163,500 First National Bank Holdings Ltd. 2,134,718
108,500 Liberty Life Association fo Africa Ltd. 3,670,326
176,000 Lonrho PLC 1,267,339
361,400 Sasol Ltd. 3,646,172
--------------
15,842,433
South Korea (0.2%)
- -------------------------------------------------------------------------------------------------------------
164,000 Daewoo Heavy Industries 812,011
232,178 Kookmin Bank 144A GDR (NON) 1,469,584
200,000 Korea Electric Power Corp. 2,726,578
20,100 Pohang Iron & Steel Company Ltd. 1,100,978
2,586 Samsung Display Rights 44,940
18,000 Samsung Display Devices Co. 896,625
27,000 Samsung Electronics Co. 1,496,622
50,200 Sansung Electro-Mechanics Co. (NON) 1,052,879
1,000 Samsung Fire & Marine Insurance 295,879
96 SK Telecom Co. Ltd. 56,228
--------------
9,952,324
Spain (1.6%)
- -------------------------------------------------------------------------------------------------------------
240,000 Banco Santander Colombia S.A. 12,407,952
1,472,400 Telephonica S.A. 1,139,674
1,677,000 Telfonica de Espana 69,962,110
--------------
83,509,736
Sweden (1.2%)
- -------------------------------------------------------------------------------------------------------------
1,351,814 ForeningsSparbanken AB 42,260,014
1,602,300 Mandumus Rights 476,068
380,005 Telefonaktiebolaget LM Ericsson Class B 20,028,425
--------------
62,764,507
Switzerland (3.4%)
- -------------------------------------------------------------------------------------------------------------
45,412 Nestle S.A. 88,069,924
14,768 Novartis AG ADR 24,408,291
175,349 Schweizerischer Bankverein 60,884,258
--------------
173,362,473
Taiwan (0.3%)
- -------------------------------------------------------------------------------------------------------------
115,800 @ Entertainment, Inc. (NON) 1,968,600
601,750 Acer, Inc. (NON) 1,003,829
37,100 Ase Test Limited (NON) 1,873,550
77,000 Asustek Computer, Inc. (NON) 1,569,427
543,000 Aurora Corp. (NON) 1,054,049
1,707,800 Bank Sinopac (NON) 1,243,166
354,000 Delta Electronics, Inc. 1,299,181
250,000 Hon Hai Precision Industry (NON) 1,455,869
71,000 Siliconware Precision Industries Co. GDR (NON) 1,070,325
377,000 Taiwan Semiconductor Manufacturing Co. (NON) 1,629,436
--------------
14,167,432
Thailand (0.1%)
- -------------------------------------------------------------------------------------------------------------
160,000 Advanced Info Service Public Co., Ltd. 1,119,171
592,100 Bangkok Bank Public Co. 144A 1,487,920
200,300 Bangkok Bank Public Co., Ltd. 503,345
400,900 Electricity Generating Public Co. Ltd. 778,951
81,000 PTT Exploration & Production PLC 856,166
343,000 Thai Farmers Bank Public Co. Ltd. 786,412
--------------
5,531,965
Turkey (0.2%)
- -------------------------------------------------------------------------------------------------------------
198,200 Haci Omer Sabanci Holdings ADR (NON) 3,592,375
4,861,600 Vestel Elektronik Sanayi ve Ticaret A.S. 651,454
102,100 Yapi ve Kredi Bankasi A.S. 4,977,375
--------------
9,221,204
United Kingdom (8.9%)
- -------------------------------------------------------------------------------------------------------------
1,763,100 British Petroleum Co. PLC 27,842,946
1,623,900 Compass Group PLC 28,101,914
1,631,460 HSBC Holdings PLC 51,473,607
596,300 Misys PLC 28,664,141
140,000 Ramco Energy PLC ADR 1,540,000
1,132,900 SEMA Group PLC 41,236,926
2,088,600 Siebe PLC 46,654,980
5,994,944 SmithKline Beecham PLC ADR 71,467,891
1,347,600 Smiths Industries PLC 19,388,676
6,326,741 Vodafone Group PLC 69,287,937
1,471,700 Zeneca Group PLC 63,387,179
--------------
449,046,197
United States (46.1%)
- -------------------------------------------------------------------------------------------------------------
414,100 Advanced Fibre Communications (NON) 17,547,488
343,800 AES Corp. (NON) 18,973,463
408,100 America Online, Inc. (NON) 32,648,000
357,800 American Express Co. 36,495,600
256,850 American International Group, Inc. 33,791,828
144,400 AMR Corp. (NON) 22,002,950
254,800 BankAmerica Corp. 21,658,000
342,900 BMC Software, Inc. (NON) 32,082,581
424,000 Bristol-Myers Squibb Co. 44,891,000
670,800 Cadence Design Systems, Inc. (NON) 24,358,425
266,100 Capital One Financial Corp. 25,562,231
343,650 Cardinal Health, Inc. 33,076,313
1,134,400 CBS Corp. 40,413,000
1,173,000 Cendant Corp. (NON) 29,325,000
498,300 Centocor, Inc. (NON) 21,022,031
593,850 Cisco Systems, Inc. (NON) 43,499,513
308,100 Clorox Co. 25,841,888
848,100 Coca-Cola Enterprises, Inc. 32,015,775
254,500 Colgate-Palmolive Co. 22,825,469
350,000 Compal Electronics, Inc. (NON) 1,523,354
567,700 Computer Associates Intl., Inc. 33,245,931
549,900 Compuware Corp. (NON) 26,876,363
632,700 Costco Companies, Inc. (NON) 35,352,113
567,079 CVS Corp. 41,822,076
765,200 Dayton Hudson Corp. 33,405,763
180,700 Dell Computer Corp. (NON) 14,591,525
298,100 Disney (Walt) Productions, Inc. 37,057,556
699,000 EMC Corp. (NON) 32,241,375
437,300 Federal Home Loan Mortgage Corp. 20,252,456
505,200 Federal National Mortgage Association 30,248,850
463,400 Fort James Corp. 22,996,225
485,300 Fred Meyer, Inc. (NON) 21,777,838
115,500 Gannett Co., Inc. 7,846,781
342,700 Gateway 2000, Inc. (NON) 20,112,206
1,376,800 General Electric Co. 117,200,100
496,900 Halliburton Co. 27,329,500
516,700 HBO & Co. 30,905,119
978,900 HEALTHSOUTH Corp. (NON) 29,550,544
636,000 Herman Miller, Inc. 19,199,250
460,000 Hewlett-Packard Co. 34,643,750
436,700 Home Depot, Inc. (The) 30,405,238
367,400 Interpublic Group Cos., Inc. 23,467,675
425,700 Jones Apparel Group, Inc. (NON) 25,462,181
236,900 Lehman Brothers Holding, Inc. 16,834,706
687,300 Lilly (Eli) & Co. 47,810,306
215,200 Linear Technology Corp. 17,323,600
821,600 Lucent Technologies, Inc. 62,544,300
337,900 Marriot International, Inc. 11,150,700
320,500 Marriot International, Inc. Class A 10,256,000
805,400 MBNA Corp. 27,282,925
624,500 Merck & Co., Inc. 75,252,250
728,800 Microsoft Corp. (NON) 65,683,100
606,200 Omnicare, Inc. 20,762,350
682,900 Parametric Technology Corp. (NON) 21,831,459
298,100 Payless Shoesource, Inc. (NON) 21,314,150
595,800 PeopleSoft, Inc. (NON) 27,704,700
669,200 PepsiCo, Inc. 26,558,875
655,900 Pfizer, Inc. 74,649,619
353,900 Procter & Gamble Co. 29,086,156
592,500 Quintiles Transnational Corp. (NON) 29,328,750
340,500 Rite Aid Corp. 10,938,563
495,300 Sara Lee Corp. 29,501,306
489,900 SBC Communications, Inc. 20,300,231
520,600 Schering-Plough Corp. 41,713,075
586,400 Southtrust Corp. 25,031,950
849,700 Southwest Airlines Co. 23,313,644
781,800 Tele-Communications, Inc. Class A (NON) 25,213,050
323,000 Tellabs, Inc. (NON) 22,892,625
436,900 Tiffany & Co. 19,878,950
746,400 TJX Cos., Inc. (The) 33,028,200
499,400 Travelers Group, Inc. 30,557,038
443,900 Tyco International Ltd. (NON) 24,192,550
396,600 VERITAS Software Corp. (NON) 21,713,850
781,800 Wal-Mart Stores, Inc. 39,529,763
662,600 Walgreen Co. 22,859,700
334,600 Warner-Lambert Co. 63,302,138
284,100 Western Atlas, Inc. (NON) 22,443,900
--------------
2,337,328,803
Venezuela (--%)
- -------------------------------------------------------------------------------------------------------------
54,000 Compania Anonima Nacional Telefonos de Venezuela ADR (NON) 1,809,000
46,833 Siderurgica Venezolana 556,344
--------------
2,365,344
--------------
Total Common Stocks (cost $4,034,351,139) $5,006,942,844
CONVERTIBLE BONDS AND NOTES (0.1%) (a)(cost $5,367,946)
PRINCIPAL AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
$ 4,200,000 Alfa S.A. 144A cv. sub. notes 8s, 2000 (Mexico) $ 5,008,500
PREFERRED STOCKS (0.1%) (a)(cost $2,348,564)
NUMBER OF SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
16,600 Petroleo Brasileiro S.A. BRC 6.258 NPV pfd. (Brazil) $ 4,210,250
INVESTMENT FUNDS (--%) (a)(cost $1,177,200)
NUMBER OF SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
21,800 India Magnum Fund Class A (acquired 3/23/95,
cost $1,177,200)(India)(NON)(RES) $ 741,200
WARRANTS(--%)(a)(NON) (cost $--) EXPIRATION
NUMBER OF WARRANTS DATE VALUE
- -------------------------------------------------------------------------------------------------------------
2,788,660 Belle Corp. (Philippines) 9/11/00 $ 7,987
SHORT-TERM INVESTMENTS (0.1%) (a)
PRINCIPAL AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
$ 1,287,000 Corporate Receivables Co., effective yield
of 5.50%, July 10, 1998 $ 1,273,040
2,892,000 Sheffield Receivables, effective yield of 5.51%,
June 16, 1998 2,871,638
--------------
Total Short-term Investments (cost $4,144,678) $ 4,144,678
- -------------------------------------------------------------------------------------------------------------
Total Investments (cost $4,047,389,527) (b) $5,021,055,459
- -------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $5,068,533,842.
(b) The aggregate identified cost on a tax basis is $4,063,666,132, resulting in gross unrealized
appreciation and depreciation of $1,045,427,719 and $88,038,392 respectively, or net unrealized
appreciation of $957,389,327.
(NON) Non-income-producing security.
(RES) Restricted, excluding 144A securities, as to public resale. The total market value of restricted
securities held at April 30, 1998 was $741,200 or less than 0.1% of net assets.
144A after the name of a security represents those exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers.
ADR, ADS, or GDR after the name of a foreign holding stands for American Depository Receipts, American
Depository Shares, or Global Depository Receipts, respectively, representing ownership of foreign
securities on deposit with a domestic custodian bank.
The fund had the following industry group concentrations greater than 10% at April 30, 1998 (as a
percentage of net assets):
Insurance and Finance 16.7%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Forward Currency Contracts to Sell at April 30, 1998 (Unaudited)
Market Aggregate Face Delivery Unrealized
Value Value Date Appreciation
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese Yen $125,668,403 $136,084,127 5/15/98 $10,415,724
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
SWAP Contracts outstanding at April 30, 1998 (Unaudited)
Unrealized
Notional Termination Appreciation/
Amount Date (Depreciation)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Agreement with Merrill Lynch, Pierce,
Fenner & Smith, Inc. Dated April 6, 1998
to receive (pay) the notional amount
multiplied by the return of Cifra S.A.
Series V (Mexico) less the notional amount
multiplied by one month LIBOR less 4%. $2,545,963 Aug-98 $23,295
- ------------------------------------------------------------------------------------------------------------
Agreement with Salomon Brothers, Inc.
Dated April 13, 1998 to receive (pay) the
notional amount multiplied by the return
of SK Telecom Co. Ltd. (South Korea) less the
notional amount multiplied by three month
LIBOR plus 1%. 1,248,567 Apr-98 (20,711)
- ------------------------------------------------------------------------------------------------------------
$2,584
- ------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
April 30, 1998 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $4,047,389,527) (Note 1) $5,021,055,459
- ---------------------------------------------------------------------------------------------------
Foreign currency (cost $7,478,341) 7,395,816
- ---------------------------------------------------------------------------------------------------
Dividends and interest receivable 8,097,839
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 10,715,316
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 144,110,819
- ---------------------------------------------------------------------------------------------------
Receivable for open forward currency contracts 10,415,724
- ---------------------------------------------------------------------------------------------------
Receivable for closed forward currency contracts 3,374,109
- ---------------------------------------------------------------------------------------------------
Receivable for open swap contracts (Note 1) 23,295
- ---------------------------------------------------------------------------------------------------
Total assets 5,205,188,377
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable to subcustiodian (Note 2) 36,392,663
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 38,123
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 81,534,609
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 6,957,065
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 7,532,580
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 986,461
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 77,962
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,998
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 2,235,868
- ---------------------------------------------------------------------------------------------------
Payable for closed forward currency contracts 552,466
- ---------------------------------------------------------------------------------------------------
Payable for open swap contracts (Note 1) 20,711
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 323,029
- ---------------------------------------------------------------------------------------------------
Total liabilities 136,654,535
- ---------------------------------------------------------------------------------------------------
Net assets $5,068,533,842
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $3,965,481,599
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (4,910,010)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions (Note 1) 124,044,434
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 983,917,819
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $5,068,533,842
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($3,027,373,978 divided by 259,002,712 shares) $11.69
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $11.69)* $12.40
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($1,926,706,607 divided by 170,711,041 shares)** $11.29
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($52,579,122 divided by 4,531,591 shares) $11.60
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $11.60)* $12.02
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($61,874,135 divided by 5,214,108 shares) $11.87
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $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, 1998 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $2,041,881) $ 23,085,618
- --------------------------------------------------------------------------------------------------
Interest 2,286,983
- --------------------------------------------------------------------------------------------------
Total investment income 25,372,601
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 14,622,168
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 6,478,245
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 45,671
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 17,875
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 3,432,081
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 8,704,770
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 172,573
- --------------------------------------------------------------------------------------------------
Reports to shareholders 94,458
- --------------------------------------------------------------------------------------------------
Registration fees 51,865
- --------------------------------------------------------------------------------------------------
Auditing 56,680
- --------------------------------------------------------------------------------------------------
Legal 14,819
- --------------------------------------------------------------------------------------------------
Postage 190,678
- --------------------------------------------------------------------------------------------------
Other 287,654
- --------------------------------------------------------------------------------------------------
Total expenses 34,169,537
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (604,222)
- --------------------------------------------------------------------------------------------------
Net expenses 33,565,315
- --------------------------------------------------------------------------------------------------
Net investment loss (8,192,714)
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 131,633,553
- --------------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 9,702,261
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the period 14,946,084
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 697,291,353
- --------------------------------------------------------------------------------------------------
Net gain on investments 853,573,251
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $845,380,537
- --------------------------------------------------------------------------------------------------
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
1998* 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (8,192,714) $ 1,217,600
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign
currency transactions 141,335,814 825,626,424
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments and assets and liabilities in
foreign currencies 712,237,437 (229,716,928)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 845,380,537 597,127,096
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A (55,521,899) (54,577,493)
- ----------------------------------------------------------------------------------------------------------------------
Class B (24,067,329) (25,358,432)
- ----------------------------------------------------------------------------------------------------------------------
Class M (740,570) (590,659)
- ----------------------------------------------------------------------------------------------------------------------
Class Y (1,101,259) (1,800,840)
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (427,627,489) (108,162,646)
- ----------------------------------------------------------------------------------------------------------------------
Class B (279,693,689) (68,080,503)
- ----------------------------------------------------------------------------------------------------------------------
Class M (7,129,800) (1,292,807)
- ----------------------------------------------------------------------------------------------------------------------
Class Y (7,589,027) (3,260,656)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 642,813,873 445,247,957
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 684,723,348 779,251,017
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 4,383,810,494 3,604,559,477
- ----------------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess of net
investment income and undistributed net investment
income of $4,910,010 and $84,713,761, respectively) $5,068,533,842 $4,383,810,494
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share April 30
operating performance (Unaudited) Year ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $12.00 $11.10 $10.13 $9.92 $9.30 $7.25
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment (loss) income --(b) .04(b) .09(b) .09 .02 .07
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.91 1.68 1.47 .43 .77 2.06
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.91 1.72 1.56 .52 .79 2.13
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.26) (.27) (.18) (.01) -- (.07)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.96) (.55) (.41) (.30) (.17) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.22) (.82) (.59) (.31) (.17) (.08)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.69 $12.00 $11.10 $10.13 $9.92 $9.30
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 20.01* 16.40 16.10 5.64 8.62 29.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,027,374 $2,628,933 $2,186,426 $1,689,656 $1,507,550 $940,985
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .60* 1.24 1.27 1.28 1.33 1.39
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.04)* .31 .84 1.05 .83 .85
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 76.59* 154.98 72.88 63.31 17.45 49.53
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0260 $.0241 $.0298
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(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 on security trades is presented for fiscal periods beginning on or
after September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share April 30
operating performance (Unaudited) Year ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $11.62 $10.78 $9.86 $9.74 $9.19 $7.22
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment (loss) income (.04)(b) (.05)(b) .01 (b) .03 .01 .05
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.84 1.64 1.43 .40 .71 1.99
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.80 1.59 1.44 .43 .72 2.04
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.17) (.20) (.11) (.01) -- (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.96) (.55) (.41) (.30) (.17) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.13) (.75) (.52) (.31) (.17) (.07)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.29 $11.62 $10.78 $9.86 $9.74 $9.19
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 19.54* 15.54 15.25 4.80 7.95 28.44
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,926,707 $1,664,215 $1,327,246 $975,794 $801,443 $233,195
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .97* 1.99 2.02 2.04 2.11 2.09
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.41)* (.45) .09 .29 .12 .23
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 76.59* 154.98 72.88 63.31 17.45 49.53
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0260 $.0241 $.0298
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(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 on security trades is presented for fiscal periods beginning on or
after September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share April 30 March 1, 1995+
operating performance (Unaudited) Year ended October 31 to October 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $11.90 $11.05 $10.09 $8.86
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment (loss) income (.03)(b) (.02)(b) .03(b) .01
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.89 1.66 1.47 1.22
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.86 1.64 1.50 1.23
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.20) (.24) (.13) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.96) (.55) (.41) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.16) (.79) (.54) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.60 $11.90 $11.05 $10.09
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 19.70* 15.72 15.54 13.88*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $52,579 $43,662 $24,179 $5,853
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .85* 1.74 1.80 1.23*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.28)* (.21) .32 .17*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 76.59* 154.98 72.88 63.31
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0260 $.0241 $.0298
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(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 on security trades is presented for fiscal periods beginning on or
after September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share April 30 June 15, 1994+
operating performance (Unaudited) Year ended October 31 to October 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $12.17 $11.24 $10.25 $10.00 $9.46
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment (loss) income .01(b) .08(b) .12(b) .09 .01
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.94 1.70 1.48 .47 .53
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.95 1.78 1.60 .56 .54
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.29) (.30) (.20) (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.96) (.55) (.41) (.30) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.25) (.85) (.61) (.31) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.87 $12.17 $11.24 $10.25 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 20.13* 16.75 16.39 6.00 5.71*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $61,874 $47,000 $66,708 $42,582 $29,396
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .47* .99 1.02 1.06 .37*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .10* .69 1.09 1.20 .42*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 76.59* 154.98 72.88 63.31 17.45
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0260 $.0241 $.0298
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(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 on security trades is presented for fiscal periods beginning on or
after September 1, 1995.
</TABLE>
Notes to financial statements
April 30, 1998 (Unaudited)
Note 1
Significant accounting policies
Putnam Global Growth Fund (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 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 approximately eight years, do not pay a
front-end sales charge but pay a higher ongoing distribution fee than class A
shares, and are subject to a contingent deferred sales charge, if those shares
are redeemed within six years of purchase. Class 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, class B, and class M shares, but do not bear a
distribution fee. Class Y shares are sold to defined contribution plans that
invest at least $250 million in a combination of Putnam Funds and other
accounts managed by affiliates of Putnam Management.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if
that fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally accepted
accounting principles and requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. 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. 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 companies and certain other accounts managed by Putnam Investment
Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc. These balances may be invested in one
or more repurchase agreements and/or short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through its
custodian, receives delivery of the underlying securities, the market value of
which at the time of purchase is required to be in an amount at least equal to
the resale price, including accrued interest. 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 gains and losses are included with the
net realized and unrealized gain or loss on investments. Net realized gains
and losses on foreign currency transactions represent net exchange gains or
losses on closed forward currency contracts, disposition of foreign currencies
and the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized appreciation and
depreciation of assets and liabilities in foreign currencies arise from
changes in the value of open forward currency contracts and assets and
liabilities other than investments at the period end, resulting from changes
in the exchange rate.
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 current 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) Swap contracts The fund may engage in emerging market swap contracts, which
involve a commitment by one party to make payments based on the terms of the
contract in exchange for a market linked return based on a notional amount.
The fund enters into the swap contracts to increase its exposure to different
underlying instruments and to gain access to markets that might be unavailable
to foreign investors or only accessible at a high excess premium. The
potential risk to the fund would be the nonperformance by the other party
involved in the swap contract. The loss incurred by the failure of the
counterparty is limited to the amount of the original investment. In addition,
losses may arise from changes in the value of the underlying securities.
H) Line of credit The fund has entered into a committed line of credit with
certain banks. This line of credit agreement includes restrictions that the
fund maintain an asset coverage ratio of at least 300% and borrowings must not
exceed prospectus limitations. For the six months ended April 30, 1998, the
fund had no borrowings against the line of credit.
I) Federal taxes It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
J) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date. Capital
gain distributions, if any, are recorded on the ex-dividend date and paid at
least annually. The amount and character of income and gains to be distributed
are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for distribution
under income tax regulations.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund. Such
fee is based on the following annual rates: 0.80% 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 the next $5 billion, 0.575% of the next $5 billion, 0.555%
of the next $5 billion, 0.54% of the next $5 billion and 0.53% thereafter.
As part of the subcustodian contract between the subcustodian bank and Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc., the
subcustodian bank has a lien on the securities of the fund to the extent
permitted by the fund's investment restrictions to cover any advances made by
the subcustodian bank for the settlement of securities purchased by the fund.
At April 30, 1998, the payable to the subcustodian bank represents the amount
due for cash advance for the settlement of a security purchased.
The fund reimburses Putnam Management an allocated amount for the compensation
and related expenses of certain officers of the fund and their staff who
provide administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a division
of PFTC.
For the six months ended April 30, 1998, fund expenses were reduced by
$604,222 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.
Each Trustee of the fund receives an annual Trustee fee, of which $3,820 has
been allocated to the fund, 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 has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund and are
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B 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 currently limit payment by the fund to 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, 1998, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $302,757 and $8,853 from the sale of
class A and class M shares, respectively and $1,078,797 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, 1998, Putnam Mutual Funds Corp., acting as underwriter
received $11,452 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended April 30, 1998, purchases and sales of investment
securities other than short-term investments aggregated $3,488,099,865 and
$3,580,714,010, 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, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
April 30, 1998
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 30,695,484 $341,022,765
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 48,096,386 460,282,527
- ------------------------------------------------------------
78,791,870 801,305,292
Shares
repurchased (38,815,073) (429,672,390)
- ------------------------------------------------------------
Net increase 39,976,797 $371,632,902
- ------------------------------------------------------------
Year ended
October 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 101,249,030 $1,191,480,880
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 14,409,751 154,040,248
- ------------------------------------------------------------
115,658,781 1,345,521,128
Shares
repurchased (93,547,155) (1,107,228,654)
- ------------------------------------------------------------
Net increase 22,111,626 $238,292,474
- ------------------------------------------------------------
Six months ended
April 30, 1998
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 15,615,849 $166,285,150
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 30,699,452 284,276,922
- ------------------------------------------------------------
46,315,301 450,562,072
Shares
repurchased (18,846,168) (201,338,772)
- ------------------------------------------------------------
Net increase 27,469,133 $249,223,300
- ------------------------------------------------------------
Year ended
October 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 38,781,150 $444,244,122
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 8,389,558 87,335,290
- ------------------------------------------------------------
47,170,708 531,579,412
Shares
repurchased (27,056,473) (312,278,426)
- ------------------------------------------------------------
Net increase 20,114,235 $219,300,986
- ------------------------------------------------------------
Six months ended
April 30, 1998
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 1,242,878 $13,759,700
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 789,184 7,505,099
- ------------------------------------------------------------
2,032,062 21,264,799
Shares
repurchased (1,168,974) (13,140,156)
- ------------------------------------------------------------
Net increase 863,088 $8,124,643
- ------------------------------------------------------------
Year ended
October 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 3,715,074 $44,560,643
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 168,896 1,798,748
- ------------------------------------------------------------
3,883,970 46,359,391
Shares
repurchased (2,403,887) (29,285,638)
- ------------------------------------------------------------
Net increase 1,480,083 $17,073,753
- ------------------------------------------------------------
Six months ended
April 30, 1998
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 1,169,527 $13,068,102
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 895,004 8,690,486
- ------------------------------------------------------------
2,064,531 21,758,588
Shares
repurchased (712,107) (7,925,560)
- ------------------------------------------------------------
Net increase 1,352,424 $13,833,028
- ------------------------------------------------------------
Year ended
October 31, 1997
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 4,445,438 $51,918,759
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 470,446 5,061,496
- ------------------------------------------------------------
4,915,884 56,980,255
Shares
repurchased (6,986,974) (86,399,511)
- ------------------------------------------------------------
Net decrease (2,071,090) $(29,419,256)
- ------------------------------------------------------------
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging 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
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Strategic Income Fund *
High Quality Bond Fund +
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Total Return Fund
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Money Market 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 Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK]
California, New York
LIFESTAGE SM FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
*Formerly Putnam Diversified Income Trust II
+Formerly Putnam Federal Income Trust
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
**An investment in a money market fund is neither insured nor
guaranteed by the U.S. government. These funds are managed to maintain a
price of $1.00 per share, although there is no assurance that this price
will be maintained in the future.
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.
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
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Robert Swift
Vice President and Fund Manager
Lisa Svensson
Vice President and Fund Manager
Kelly A. Morgan
Vice President and Fund Manager
Thomas R. Haslett
Vice President and Fund Manager
Michael Arends
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
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. You can also learn more at Putnam
Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution; are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board, or any other agency;
and involve risk, including the possible loss of the principal amount
invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
SA006-42884 6/98
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ------------------------------------------------------------------------
Putnam Global Growth Fund
Supplement to Report dated April 30, 1998
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 report.
RESULTS AT A GLANCE
- ------------------------------------------------------------------------
Total return
for periods ended 4/30/98: NAV
20.13%
1 year 28.46
Five years 115.64
Annual average 16.61
10 years 225.54
Annual average 12.54
Annual average, life of fund
(since class A inception, 9/1/67) 11.11
Share value: NAV
10/31/97 $12.17
4/30/98 $11.87
- ------------------------------------------------------------------------
Capital gains
Distributions: No. Income Short Long Total
1 0.285 0.547 1.417 2.249
- ------------------------------------------------------------------------
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.
