Putnam
Global
Growth Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-00
[SCALE LOGO OMITTED]
FROM THE TRUSTEES
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM III]
Dear Shareholder:
It is a pleasure to greet you in our new roles as Chairman of the
Trustees and President of the Funds. As you know, both of us have been
members of the Board of Trustees for a number of years -- years during
which the global securities markets, the mutual fund industry, and
Putnam itself have experienced tremendous growth and change.
As we look to the future, we are certain that the changes will be
breathtaking in their scope. What will not change is the Trustees'
dedication to serving the best interests of our shareholders.
We welcome the challenges that lie ahead and are confident that Putnam
and your Board will continue to face those challenges successfully as
they have for more than 60 years. We look forward to helping you meet
your financial objectives for many years to come.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
December 20, 2000
REPORT FROM FUND MANAGEMENT
Robert J. Swift
Lisa H. Svensson
Kelly A. Morgan
Stephen P. Dexter
Manuel Weiss Herrero
During the 12 months ended October 31, 2000, markets shifted from
unbridled optimism to mounting skepticism. As Putnam Global Growth Fund
began its 2000 fiscal year on November 1, 1999, growth stocks in global
markets were in the midst of an historic rally. The surge continued for
several more months but began to subside early in 2000. However, while
the enthusiasm of investors and the direction of markets changed course,
the fundamental performance of most of the companies your fund owns did
not. These companies continue to deliver rapid earnings, revenue, and
unit growth. They remain leaders in their respective industries,
protecting their future by successfully warding off new competition. We
believe these characteristics account for your fund's gains over the
past year despite recent volatility.
Total return for 12 months ended 10/31/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
-----------------------------------------------------------------------
9.76% 3.44% 8.95% 4.03% 8.95% 7.96% 9.22% 5.40%
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Past performance is not indicative of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 6.
* TECHNOLOGY AND TELECOMMUNICATIONS STOCKS RETREAT IN SECOND HALF
The stocks that drove the fund's strong gains for most of the first half
of the fiscal year were primarily those of technology and
telecommunications companies. These stocks caught the fancy of investors
for a couple of reasons. Advances in the capabilities of computer
networks to transmit large quantities of data were poised to attract
heavy capital investment from businesses. On the consumer side, the
popularity of wireless telephones has generated huge sales. Worldwide,
it is estimated that more than 400 million wireless handsets will be
sold in 2000, following sales of 300 million in 1999.
[GRAPHIC OMITTED: horizontal bar chart TOP COUNTRY ALLOCATIONS]
TOP COUNTRY ALLOCATIONS*
United States 61.1%
United Kingdom 10.1%
France 8.7%
Japan 4.6%
Netherlands 4.0%
Footnote reads:
*Based on net assets as of 10/31/00. Holdings will vary over time.
The enthusiasm for technology and telecommunications stocks peaked in
March. With interest rates on the rise in the United States and Europe,
markets became concerned that many of these stocks had become
overvalued, and a correction set in. From March to May, the fund
experienced a significant decline, primarily because of declines in the
value of several Japanese technology holdings as well as QUALCOMM and
Yahoo!, Inc. of the United States. To reduce the fund's risk exposure,
we reduced several of its Japanese positions.
For the balance of the fiscal year, stocks in these leading growth
sectors have remained volatile. As part of our investment process, we
have closely monitored both earnings and revenue growth in all of our
holdings and have sold a few stocks that have been disappointing.
Overall, though, we believe that the business and consumer spending
trends supporting these sectors remain in place.
Only in the telecommunications sector has there been a significant
change in the fundamental situation. Following auctions in the United
Kingdom and Germany for the next generation of wireless operating
licenses, several telecommunication companies, including one of your
fund's top holdings, U.K.-based Vodafone Group, were compelled to pay
higher government fees. This funding question weighed on the entire
sector. Following a more recent auction in Italy where fees were less
burdensome, conditions have improved somewhat. We also recently added
U.S. stocks Sprint PCS and Nextel based on improving fundamentals such
as rising subscriber growth and rising revenues per subscriber. Although
these holdings, as well as others discussed in this report, were viewed
favorably at the end of the reporting period, all are subject to review
and adjustment in accordance with the fund's investment strategy and may
vary in the future.
* FUND BROADENS EXPOSURES TO MANY SECTORS
Part of our growth-oriented investment research seeks to identify stocks
that might have positive earnings surprise that can result in
significant gains. During the past year, our research determined that a
number of stocks in many different sectors had an increasing potential
for positive earnings surprises. This finding represented a change from
earlier in the fiscal year, when almost all of the possible surprises we
could identify were in the technology and telecommunications sectors. As
a result of this shift, we have added new holdings in a variety of
sectors. While the technology sector remains the largest portion of the
portfolio, we have recently been building exposure to other sectors.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Vodafone Group PLC
United Kingdom
Communication services
General Electric Co.
United States
Conglomerates
Cisco Systems, Inc.
United States
Technology
Total Fina Elf S.A.
France
Energy
Aegon N.V.
Netherlands
Financial
Sun Microsystems, Inc.
United States
Technology
Sanofi-Synthelabo S.A.
France
Health care
NTT DoCoMo
Japan
Communication services
Goldman Sachs Group, Inc.
United States
Financial
Bank of New York Company, Inc.
United States
Financial
Footnote reads:
These holdings represent 26.0% of the fund's net assets as of 10/31/00.
Portfolio holdings will vary over time.
We added several consumer nondurables companies: Groupe Danone, a food
company based in France; Anheuser-Busch, the U.S. beverages company; and
PepsiCo, a beverage and snacks company. In the pharmaceuticals sector,
we added to the fund's position in Sanofi-Synthelabo of France and
established a new position in AstraZeneca in the United Kingdom. In the
United States, we added Johnson & Johnson and Merck & Co. In the energy
sector, we added Total Fina Elf of France and Transocean, an oil service
stock based in the United States, companies that are benefiting from
higher petroleum prices and increased exploration for new reserves.
SCALE ECONOMIES IN THE NEW ECONOMY
The media's image of the New Economy suggests that small companies are the
leaders in identifying and exploiting new growth opportunities. Our research
shows the opposite is true. Large companies, like those in which Putnam
Global Growth Fund invests, derive advantages from their size, logistical
capabilities, and financial muscle -- what scholars call economies of scale.
After all, the new computer and telecommunications technologies are complex
and expensive to implement, requiring large investments in capital and
skilled technical workers. Also, as world markets become more integrated,
large companies have an advantage in extending their brand images to achieve
higher sales. The competition for customers requires savvy marketing and
extensive customer service capabilities. We believe that your fund's holdings
in large-capitalization growth stocks positions it to benefit from some of
the most attractive prospects in the New Economy.
* FINANCIAL STOCKS EMERGE AS LEADERS
The financial holdings in the portfolio are primarily growing investment
companies, what we call asset gatherers, because they are attracting new
clients and building the amount of assets they manage. They also tend to
offer a wider array of innovative services for clients, such as tax and
retirement planning. This business model is attractive for a couple of
reasons. Around the world, pension systems are becoming increasingly
privatized, a structural change that supports the growth of these
investment companies. Secondly, by offering a wider array of services,
these companies build client loyalty that serves as a competitive
advantage. In contrast, traditional banking and brokerage companies tend
to provide uniform services that are easy for their competitors to
match.
We took profits on one fund financial holding -- Marschollek,
Lautenschlaeger und Partner, a German brokerage company -- following
its strong performance. We recently added Goldman Sachs, the U.S.-based
global investment bank. Other new holdings in this sector include
Aegon, an insurance company and asset manager based in the Netherlands.
Sales of variable annuities are driving Aegon's growth in new assets.
We also added American International Group, Inc., a U.S. insurance
company that is expanding rapidly. Also in the United States, we added
Freddie Mac (FHLMC), which is achieving earnings growth as a result of
favorable interest-rate trends. Finally, we have added exposure to U.S.
custodial banks, such as State Street Bank and Bank of New York.
* SOLID FUNDAMENTALS SUPPORT DIVERSIFICATION
In the past several months, global markets have struggled to assign
appropriate prices for many growth stocks. This effort is the normal
result of higher interest rates causing a valuation correction. The
markets also have tried to assess the impact of a slowing U.S. economy
on earnings and revenues of growth stocks around the world. Our research
suggests that aside from a few individual company disappointments, the
general earnings trends supporting technology and telecommunications
stocks remain strong. In addition, a variety of stocks in other sectors
also have emerged as growth stocks. For that reason, we have diversified
holdings across more sectors. In terms of country positions, U.S. stocks
continue to represent more than half of the portfolio, while, as
mentioned earlier, our Japanese weighting is smaller than it was early
in the fiscal year. We believe these decisions have helped to moderate
the portfolio's risk profile while positioning the fund to take
advantage of growth stocks around the world.
Reflecting Putnam Global Growth Fund's solid long-term performance,
Lipper, an independent rating agency, ranked the fund's class A shares
in the top quartile of global funds for 10-year performance as of
10/31/00. The fund ranked in the top 23%, or 6 out of 26 global funds
that were ranked.
Past performance is no guarantee of future results. Lipper is an
industry research firm whose rankings are based on total return
performance, vary over time, and do not reflect the effects of sales
charges. Performance of other share classes will vary. The fund was
ranked 31 out of 120 (top 26%) for the five-year period and 32 out of
186 (top 18%) for the three-year period.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 10/31/00, 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.
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 10/31/00
Class A Class B Class C Class M
(inception dates) (9/1/67) (4/27/92) (2/1/99) (3/1/95)
NAV POP NAV CDSC NAV CDSC NAV POP
------------------------------------------------------------------------------
1 year 9.76% 3.44% 8.95% 4.03% 8.95% 7.96% 9.22% 5.40%
------------------------------------------------------------------------------
5 years 136.44 122.80 127.73 125.73 127.64 127.64 130.52 122.37
Annual average 18.78 17.38 17.89 17.68 17.88 17.88 18.18 17.33
------------------------------------------------------------------------------
10 years 303.51 280.54 273.71 273.71 274.33 274.33 283.49 269.97
Annual average 14.97 14.30 14.09 14.09 14.11 14.11 14.39 13.98
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Annual average
(life of fund) 11.43 11.23 10.39 10.39 10.59 10.59 10.68 10.56
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 10/31/00
MSCI
MSCI All-Country Consumer
World Index* World Free Index* price index
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1 year 1.09% 0.80% 3.45%
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5 years 97.65 93.05 13.14
Annual average 14.59 14.05 2.50
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10 years 224.56 228.38 30.26
Annual average 12.49 12.62 2.68
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Annual average
(life of fund) --* --* 5.09
---------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. 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,
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. For class C shares, returns for
periods prior to their inception are derived from the historical
performance of class A shares, adjusted to reflect both the CDSC
currently applicable to class C shares, which is 1% for the first year
and is eliminated thereafter, and the higher operating expenses
applicable to class C shares. All returns assume reinvestment of
distributions at NAV. 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.
*The inception dates of these indexes were after the fund's inception.
The inception date of the MSCI World Index was 12/31/69. The inception
date of the MSCI All-Country World Free Index was 12/31/87.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 10/31/90
MSCI All-Country
Fund's class A World Free MSCI Consumer price
Date shares at POP Index World Index index
10/31/90 9,425 10,000 10,000 10,000
10/31/91 10,987 11,716 11,575 10,292
10/31/92 10,822 11,240 10,970 10,622
10/31/93 14,027 14,415 13,932 10,914
10/31/94 15,235 15,761 14,998 11,199
10/31/95 16,094 17,010 16,420 11,513
10/31/96 18,686 19,706 19,096 11,858
10/31/97 21,750 22,872 22,299 12,105
10/31/98 24,583 25,852 25,701 12,277
10/31/99 34,670 32,579 32,105 12,592
10/31/00 $38,054 $32,838 $32,456 $13,026
Footnote reads:
Past performance is no assurance of future results. At the end of the
same time period, a $10,000 investment in the fund's class B and class C
shares would have been valued at $37,371 and $37,433, respectively and
no contingent deferred sales charges would apply; a $10,000 investment
in the fund's class M shares would have been valued at $38,349 ($36,997
at public offering price).
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 10/31/00
Class A Class B Class C Class M
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Distributions
(number) 1 1 1 1
-----------------------------------------------------------------------------
Income $-- $-- $-- $--
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Capital gains
Long-term 1.059 1.059 1.059 1.059
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Short-term 0.747 0.747 0.747 0.747
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Total $1.806 $1.806 $1.806 $1.806
-----------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
-----------------------------------------------------------------------------
10/31/99 $15.07 $15.99 $14.43 $14.98 $14.90 $15.44
-----------------------------------------------------------------------------
10/31/00 15.01 15.93 14.20 14.80 14.75 15.28
-----------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 9/30/00 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (9/1/67) (4/27/92) (2/1/99) (3/1/95)
NAV POP NAV CDSC NAV CDSC NAV POP
------------------------------------------------------------------------------
1 year 25.07% 17.84% 24.14% 19.14% 24.11% 23.11% 24.51% 20.12%
------------------------------------------------------------------------------
5 years 144.64 130.49 135.53 133.53 135.54 135.54 138.55 130.22
Annual average 19.59 18.18 18.69 18.49 18.69 18.69 18.99 18.15
------------------------------------------------------------------------------
10 years 344.08 318.76 310.93 310.93 311.72 311.72 321.92 306.90
Annual average 16.08 15.40 15.18 15.18 15.20 15.20 15.48 15.07
------------------------------------------------------------------------------
Life of fund
Annual average 11.62 11.42 10.58 10.58 10.78 10.78 10.86 10.74
------------------------------------------------------------------------------
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 C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
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 5.75% maximum 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 or C shares and assumes redemption at the
end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one
year after purchase.
COMPARATIVE BENCHMARKS
Morgan Stanley Capital International (MSCI) All-Country World Free
Index* is an unmanaged list of global equity securities available to
non-domestic investors, with all values expressed in U.S. dollars.
The MSCI World Index* is a market-capitalization weighted index composed
of companies representative of the market structure of 22 Developed
Market countries in North America, Europe, and the Asia/Pacific Region
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 into account brokerage fees or taxes. Securities in
the fund do not match those in the indexes and performance of the fund wil
differ. It is not possible to invest directly in an index.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss
for the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that
remain in the portfolio -- any change in unrealized gains or losses over
the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders
Putnam Global Growth Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Global Growth Fund, including the fund's portfolio, as of October
31, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in
the two-year period then ended and the financial highlights for each of
the years or periods in the two-year period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial highlights for each of the years in the three-year period
ended October 31, 1998 were audited by other auditors whose report dated
December 10, 1998 expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform our audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of October 31, 2000 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam Global Growth Fund as of October 31, 2000,
the results of its operations, changes in its net assets and financial
highlights for each of the years or periods described above, in
conformity with accounting principles generally accepted in the United
States of America.
KPMG LLP
Boston, Massachusetts
November 28, 2000
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
October 31, 2000
COMMON STOCKS (98.4%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Belgium (0.1%)
-------------------------------------------------------------------------------------------------------------------
31,550 Dexia $ 4,799,583
Brazil (0.4%)
-------------------------------------------------------------------------------------------------------------------
1,428,500 Companhia de Bebidas das Americas ADR 32,230,531
Canada (1.3%)
-------------------------------------------------------------------------------------------------------------------
2,430,100 Bombardier, Inc. 38,119,528
1,340,000 Nortel Networks Corp. 60,645,795
-------------
98,765,323
Finland (1.3%)
-------------------------------------------------------------------------------------------------------------------
2,496,884 Nokia Oyj AB 102,610,135
France (8.7%)
-------------------------------------------------------------------------------------------------------------------
234,532 Altran Technologies S.A. 47,882,698
241,800 Dassault Systemes S.A. 18,412,556
528,675 Groupe Danone 73,838,980
1,175,800 Havas Advertising S.A. 18,923,355
776,500 L'Oreal S.A. 59,227,538
3,144,660 Sanofi-Synthelabo S.A. 165,236,160
1,105,376 Societe Television Francaise (T.F.1) 60,236,636
887,044 STMicroelectronics N.V. 44,692,714
1,370,025 Total Fina Elf S.A. 195,760,817
-------------
684,211,454
Germany (0.6%)
-------------------------------------------------------------------------------------------------------------------
568,507 Consors Discount Broker AG (NON) 45,193,748
Ireland (0.7%)
-------------------------------------------------------------------------------------------------------------------
1,133,700 Elan Corp. PLC ADR (NON) 58,881,544
Italy (2.2%)
-------------------------------------------------------------------------------------------------------------------
2,769,500 Banca Fideuram SpA 42,530,381
16,549,270 BiPop-Carire SpA (REL) (RES) 130,717,719
-------------
173,248,100
Japan (4.6%)
-------------------------------------------------------------------------------------------------------------------
82,800 Keyence Corp 25,709,104
326,400 Murata Manufacturing Co., Ltd. 39,043,634
6,335 NTT DoCoMo 156,083,074
2,079,000 Sumitomo Electric Industries, Ltd. 38,369,527
1,482,000 Takeda Chemical Industries 97,596,446
-------------
356,801,785
Netherlands (4.0%)
-------------------------------------------------------------------------------------------------------------------
4,364,800 Aegon N.V. 173,121,062
2,184,500 ASM Lithography Holding N.V. (NON) 59,632,426
218,100 Gucci Group N.V. 21,256,571
917,700 ING Groep N.V. 62,935,591
-------------
316,945,650
Singapore (0.6%)
-------------------------------------------------------------------------------------------------------------------
10,842,000 Chartered Semiconductor Manufacturing, Ltd. (NON) 46,951,111
Sweden (1.1%)
-------------------------------------------------------------------------------------------------------------------
3,442,314 Securitas AB Class B 73,211,471
915,102 Skandia Forsakrings AB 15,487,747
-------------
88,699,218
Switzerland (0.8%)
-------------------------------------------------------------------------------------------------------------------
49,253 Swatch Group AG Class B 65,210,358
Taiwan (0.8%)
-------------------------------------------------------------------------------------------------------------------
5,296,886 United Microelectronics Corp. ADR (NON) 60,252,078
United Kingdom (10.1%)
-------------------------------------------------------------------------------------------------------------------
9,425,550 ARM Holdings PLC (NON) 93,051,292
2,229,000 AstraZeneca Group PLC 104,460,088
7,610,000 Capita Group PLC 58,003,040
13,377,600 Energis PLC (NON) 114,490,330
2,204,770 Logica PLC 65,266,047
945,500 Pearson PLC 25,380,796
79,388,092 Vodafone Group PLC 330,495,525
-------------
791,147,118
United States (61.1%)
-------------------------------------------------------------------------------------------------------------------
1,248,000 AFLAC, Inc. 91,182,000
670,400 Amdocs, Ltd. (NON) 43,450,300
2,263,093 America Online, Inc. (NON) 114,127,780
1,840,200 American Express Co. 110,412,000
941,712 American International Group, Inc. 92,287,776
1,744,500 Anheuser-Busch Cos., Inc. 79,810,875
436,350 Applied Micro Circuits Corp. (NON) 33,353,503
2,575,950 Bank of New York Company, Inc. 148,278,122
869,370 BEA Systems, Inc. (NON) 62,377,298
4,348,571 Cisco Systems, Inc. (NON) 234,279,263
2,305,866 Citigroup, Inc. 121,346,198
708,500 Comerica, Inc. 42,731,406
1,079,225 Corning, Inc. 82,560,713
482,100 El Paso Energy Corp. 30,221,644
1,569,748 EMC Corp. (NON) 139,805,681
1,267,700 ExxonMobil Corp. 113,062,994
719,800 Fifth Third Bancorp 36,979,725
2,416,700 Freddie Mac (FHLMC) 145,002,000
770,050 Genentech, Inc. (NON) 63,529,125
5,704,159 General Electric Co. 312,659,215
1,502,500 Goldman Sachs Group, Inc. 149,968,281
319,350 I2 Technologies, Inc. (NON) 54,289,500
1,943,600 Intel Corp. 87,462,000
1,279,725 JDS Uniphase Corp. (NON) 104,217,605
977,500 Johnson & Johnson 90,052,188
316,050 Juniper Networks, Inc. (NON) 61,629,750
999,776 Linear Technology Corp. 64,548,038
1,086,200 Maxim Integrated Products, Inc. (NON) 72,028,638
739,700 Medtronic, Inc. 40,174,956
753,600 Merck & Co., Inc. 67,776,900
1,132,528 Microsoft Corp. (NON) 78,002,866
853,500 Morgan Stanley Dean Witter & Co. 68,546,719
3,042,100 Nextel Communications, Inc. Class A (NON) 116,930,719
879,000 Omnicom Group, Inc. 81,087,750
780,900 PepsiCo, Inc. 37,824,844
1,008,600 Pharmacia Corp. 55,473,000
164,750 PMC - Sierra, Inc. (NON) 27,925,125
543,200 QUALCOMM, Inc. (NON) 35,367,413
1,339,600 SBC Communications, Inc. 77,278,175
1,438,850 Schering-Plough Corp. 74,370,559
2,478,325 Schwab (Charles) Corp. 87,051,166
358,800 Siebel Systems, Inc. (NON) 37,651,575
1,883,100 Southwest Airlines Co. 53,668,350
1,678,700 Sprint Corp. (PCS Group) (NON) 64,000,438
1,062,825 State Street Corp. 132,576,791
1,520,300 Sun Microsystems, Inc. (NON) 168,563,263
1,916,700 Sysco Corp. 100,027,781
471,300 Time Warner, Inc. 35,776,383
1,010,800 Transocean Sedco Forex, Inc. 53,572,400
1,386,400 Tyco International, Ltd. 78,591,550
1,948,500 United Parcel Service, Inc. Class B 118,371,373
378,000 VeriSign, Inc. (NON) 49,896,000
364,475 Veritas Software Corp. (NON) 51,396,670
1,050,461 Viacom, Inc. Class B (NON) 59,744,969
560,700 Xilinx, Inc. (NON) 40,615,706
1,938,650 Yahoo!, Inc. (NON) 113,653,358
--------------
4,787,570,417
--------------
Total Common Stocks (cost $6,488,432,052) $7,713,518,153
<CAPTION>
PREFERRED STOCKS (1.4%) (a) (cost 45,581,588)
NUMBER OF SHARES VALUE
<S> <C> <C>
-------------------------------------------------------------------------------------------------------------------
832,233 Marschollek, Lautenschlaeger und Partner AG
DEM 3.05 pfd. $ 112,145,477
<CAPTION>
SHORT-TERM INVESTMENTS (2.7%) (a)
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
-------------------------------------------------------------------------------------------------------------------
$ 89,600,000 UBS Finance effective yield of 6.65%, November 1, 2000 $ 89,583,449
36,020,000 Wal-Mart Stores, Inc. effective yield of 6.55%,
November 3, 2000 36,000,339
80,442,000 Interest in $800,000,000 joint repurchase agreement dated
October 31, 2000, with S.B.C. Warburg Inc. due
November 1, 2000, with respect to various U.S.
Government obligations -- maturity value of
$80,456,770 for an effective yield of 6.61% 80,442,000
--------------
Total Short-Term Investments (cost $206,025,788) $ 206,025,788
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $6,740,039,428) (b) $8,031,689,418
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $7,835,406,747.
(b) The aggregate identified cost on a tax basis is $6,823,373,081,
resulting in gross unrealized appreciation and depreciation of
$1,562,127,191 and $353,810,854, respectively, or net unrealized
appreciation of $1,208,316,337.
(NON) Non-income-producing security.
(REL) BiPop-Carire SpA is involved in a joint venture with Putnam
Investment Management, Inc.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at October 31, 2000,
was $130,717,719 or 1.7% of net assets.
ADR after the name of a foreign holding stands for American
Depositary 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 October 31, 2000, (as a percentage of net assets):
Financial 13.5%
Telecommunications 11.0
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $6,740,039,428) (Note 1) $8,031,689,418
-------------------------------------------------------------------------------------------
Cash 1,838
-------------------------------------------------------------------------------------------
Foreign cash (cost $21,435) 33,212
-------------------------------------------------------------------------------------------
Dividends and interest receivable 2,094,547
-------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 12,860,003
-------------------------------------------------------------------------------------------
Receivable for securities sold 110,010,688
-------------------------------------------------------------------------------------------
Total assets 8,156,689,706
Liabilities
-------------------------------------------------------------------------------------------
Payable for securities purchased 244,264,344
-------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 57,720,024
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 13,046,079
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,665,847
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 105,176
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 11,262
-------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 2,842,248
-------------------------------------------------------------------------------------------
Other accrued expenses 627,979
-------------------------------------------------------------------------------------------
Total liabilities 321,282,959
-------------------------------------------------------------------------------------------
Net assets $7,835,406,747
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $5,544,512,659
-------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 999,161,044
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 1,291,733,044
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $7,835,406,747
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($5,574,968,425 divided by 371,311,639 shares) $15.01
-------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $15.01)* $15.93
-------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($1,812,160,719 divided by 127,660,959 shares)** $14.20
-------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($83,668,941 divided by 5,652,405 shares)** $14.80
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($85,216,857 divided by 5,777,355 shares) $14.75
-------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $14.75)* $15.28
-------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($279,391,805 divided by 18,223,719 shares) $15.33
-------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000
or more and on group sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended October 31, 2000
<S> <C>
Investment income:
-------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $1,885,260) $ 27,462,969
-------------------------------------------------------------------------------------------
Interest 7,751,752
-------------------------------------------------------------------------------------------
Total investment income 35,214,721
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 52,920,117
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 14,352,688
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 87,101
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 34,266
-------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 14,730,824
-------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 22,702,484
-------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 586,945
-------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 729,542
-------------------------------------------------------------------------------------------
Other 2,737,695
-------------------------------------------------------------------------------------------
Total expenses 108,881,662
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (2,435,371)
-------------------------------------------------------------------------------------------
Net expenses 106,446,291
-------------------------------------------------------------------------------------------
Net investment loss (71,231,570)
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 1,118,228,225
-------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 2,353,616
-------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the year 1,373,177
-------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the year (509,591,766)
-------------------------------------------------------------------------------------------
Net gain on investments 612,363,252
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $541,131,682
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year ended October 31
---------------------------------
2000 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment loss $ (71,231,570) $ (37,197,669)
--------------------------------------------------------------------------------------------------
Net realized gain on investments 1,120,581,841 832,462,063
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments and assets and liabilities in foreign currencies (508,218,589) 1,127,783,290
--------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 541,131,682 1,923,047,684
--------------------------------------------------------------------------------------------------
Distributions to shareholders:
--------------------------------------------------------------------------------------------------
From net investment income
Class A -- (12,641,971)
--------------------------------------------------------------------------------------------------
Class Y -- (427,765)
--------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (520,018,235) (85,069,926)
--------------------------------------------------------------------------------------------------
Class B (255,061,013) (52,122,170)
--------------------------------------------------------------------------------------------------
Class C (2,755,243) --
--------------------------------------------------------------------------------------------------
Class M (9,367,009) (1,534,321)
--------------------------------------------------------------------------------------------------
Class Y (25,352,554) (1,818,004)
--------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,438,269,404 170,921,093
--------------------------------------------------------------------------------------------------
Total increase in net assets 1,166,847,032 1,940,354,620
Net assets
--------------------------------------------------------------------------------------------------
Beginning of year 6,668,559,715 4,728,205,095
--------------------------------------------------------------------------------------------------
End of year (including distributions in
excess of net investment income of $-- and
$34,223,643, respectively) $7,835,406,747 $6,668,559,715
--------------------------------------------------------------------------------------------------
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
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended October 31
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.07 $11.01 $12.00 $11.10 $10.13
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income (loss)(b) (.11) (.05) -- .04 .09
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.86 4.48 1.23 1.68 1.47
-----------------------------------------------------------------------------------------------------
Total from
investment operations 1.75 4.43 1.23 1.72 1.56
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income -- (.05) (.26) (.27) (.18)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.81) (.32) (1.96) (.55) (.41)
-----------------------------------------------------------------------------------------------------
Total distributions (1.81) (.37) (2.22) (.82) (.59)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.01 $15.07 $11.01 $12.00 $11.10
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 9.76 41.04 13.02 16.40 16.10
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,574,968 $4,254,993 $2,882,999 $2,628,933 $2,186,426
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.07 1.10 1.18 1.24 1.27
-----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.63) (.39) (.01) .31 .84
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 156.94 165.64 162.35 154.98 72.88
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total 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) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS B
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended October 31
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.43 $10.59 $11.62 $10.78 $9.86
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income (loss)(b) (.23) (.14) (.08) (.05) .01
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.81 4.30 1.18 1.64 1.43
-----------------------------------------------------------------------------------------------------
Total from
investment operations 1.58 4.16 1.10 1.59 1.44
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income -- -- (.17) (.20) (.11)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.81) (.32) (1.96) (.55) (.41)
-----------------------------------------------------------------------------------------------------
Total distributions (1.81) (.32) (2.13) (.75) (.52)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $14.20 $14.43 $10.59 $11.62 $10.78
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 8.95 40.00 12.13 15.54 15.25
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,812,161 $2,072,050 $1,732,139 $1,664,215 $1,327,246
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.82 1.85 1.93 1.99 2.02
-----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (1.39) (1.14) (.75) (.45) .09
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 156.94 165.64 162.35 154.98 72.88
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total 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) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS C
--------------------------------------------------------------
For the period
Per-share Year ended Feb. 1, 1999+
operating performance Oct. 31 to Oct. 31
--------------------------------------------------------------
2000 1999
--------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $14.98 $12.97
--------------------------------------------------------------
Investment operations
--------------------------------------------------------------
Net investment income (loss)(b) (.22) (.10)
--------------------------------------------------------------
Net realized and unrealized
gain on investments 1.85 2.11
--------------------------------------------------------------
Total from
investment operations 1.63 2.01
--------------------------------------------------------------
Less distributions:
--------------------------------------------------------------
From net
investment income -- --
--------------------------------------------------------------
From net realized gain
on investments (1.81) --
--------------------------------------------------------------
Total distributions (1.81) --
--------------------------------------------------------------
Net asset value,
end of period $14.80 $14.98
--------------------------------------------------------------
Ratios and supplemental data
--------------------------------------------------------------
Total return at
net asset value (%)(a) 8.95 15.50*
--------------------------------------------------------------
Net assets, end of period
(in thousands) $83,669 $19,269
--------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.82 1.38*
--------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (1.34) (.83)*
--------------------------------------------------------------
Portfolio turnover (%) 156.94 165.64
--------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total 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) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS M
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended October 31
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.90 $10.90 $11.90 $11.05 $10.09
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income (loss)(b) (.19) (.11) (.06) (.02) .03
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.85 4.43 1.22 1.66 1.47
-----------------------------------------------------------------------------------------------------
Total from
investment operations 1.66 4.32 1.16 1.64 1.50
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income -- -- (.20) (.24) (.13)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.81) (.32) (1.96) (.55) (.41)
-----------------------------------------------------------------------------------------------------
Total distributions (1.81) (.32) (2.16) (.79) (.54)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $14.75 $14.90 $10.90 $11.90 $11.05
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 9.22 40.34 12.48 15.72 15.54
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $85,217 $76,537 $50,700 $43,662 $24,179
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.57 1.60 1.68 1.74 1.80
-----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (1.13) (.89) (.50) (.21) .32
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 156.94 165.64 162.35 154.98 72.88
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total 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) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS Y
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended October 31
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.32 $11.20 $12.17 $11.24 $10.25
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income (loss)(b) (.07) (.02) .03 .08 .12
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.89 4.54 1.25 1.70 1.48
-----------------------------------------------------------------------------------------------------
Total from
investment operations 1.82 4.52 1.28 1.78 1.60
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income -- (.08) (.29) (.30) (.20)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.81) (.32) (1.96) (.55) (.41)
-----------------------------------------------------------------------------------------------------
Total distributions (1.81) (.40) (2.25) (.85) (.61)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.33 $15.32 $11.20 $12.17 $11.24
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 10.08 41.19 13.35 16.75 16.39
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $279,392 $245,711 $62,367 $47,000 $66,708
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .82 .85 .93 .99 1.02
-----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.38) (.13) .24 .69 1.09
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 156.94 165.64 162.35 154.98 72.88
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total 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) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
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 mainly
in common stocks of companies worldwide.
The fund offers class A, class B, class C, 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 C shares are subject to the same fees and
expenses as class B shares, except that class C shares have a one-year
1.00% contingent deferred sales charge and do not convert to class A
shares. 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 and class C shares. Class Y shares, which
are sold at net asset value, are generally subject to the same expenses
as class A, class B, class C and class M shares, but do not bear a
distribution fee. Class Y shares are sold to defined contribution plans
that invest at least $150 million in a combination of Putnam funds and
other accounts managed by affiliates of Putnam Investment Management,
Inc., ("Putnam Management"), the fund's manager, a wholly-owned
subsidiary of Putnam Investments, Inc.
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 of the financial statements and the reported
amounts of increases and decreases in net assets from operations during
the reporting period. 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 sales price on its principal exchange, 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
value. Other investments, including restricted securities, 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 Management. 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.
Collateral for certain tri-party repurchase agreements is held at the
counterparty's custodian in a segregated account for the benefit of the
fund and the counterparty. 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). Gains or losses on securities sold are determined
on the identified cost basis. 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. Non-cash dividends, if any,
are recorded at the fair market value of the securities received.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and 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 realized
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. Investments in foreign securities involve certain risks, including
those related to economic instability, unfavorable political
developments, and currency fluctuations, not present with domestic
investments.
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) 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 year ended
October 31, 2000, the fund had no borrowings against the line of credit.
H) 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.
I) 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. These differences include temporary and permanent
differences of losses on wash sale transactions, foreign currency gains
and losses and realized and unrealized gains and losses on passive
foreign investment companies. Reclassifications are made to the fund's
capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations. For
the year ended October 31, 2000, the fund reclassified $105,455,213 to
decrease accumulated net investment loss and $4,097,560 to increase
paid-in-capital, with a decrease to accumulated net realized gains of
$109,552,773. The calculation of net investment income per share in the
financial highlights table excludes these adjustments.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. 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, 0.53% of the next $5 billion, 0.52% of the next $5
billion, 0.51% of the next $5 billion, 0.50% of the next $5 billion,
0.49% of the next $5 billion, 0.48% of the next $8.5 billion and 0.47%
thereafter.
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 Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor
Services, a division of PFTC.
For the year ended October 31, 2000, fund expenses were reduced by
$2,435,371 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 $3,854
has been allocated to the fund, and an additional fee for each Trustees
meeting attended. 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
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 a 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, class C 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 Retail Management, Inc., 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 Retail Management, Inc. at an annual rate up to
0.35%, 1.00%, 1.00% and 1.00% of the average net assets attributable to
class A, class B, class C and class M shares, respectively. The Trustees
have approved payment by the fund at an annual rate of 0.25%, 1.00%,
1.00% and 0.75% of the average net assets attributable to class A, class
B, class C and class M shares, respectively.
For the year ended October 31, 2000, Putnam Retail Management, Inc.,
acting as underwriter received net commissions of $1,709,373 and $41,504
from the sale of class A and class M shares, respectively, and received
$1,664,779 and $20,812 in contingent deferred sales charges from
redemptions of class B and class C shares, respectively. A deferred
sales charge of up to 1% is assessed on certain redemptions of class A
shares. For the year ended October 31, 2000, Putnam Retail Management,
Inc., acting as underwriter received $95,915 on class A redemptions.
Note 3
Purchases and sales of securities
During the year ended October 31, 2000, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $13,826,818,455 and $13,121,274,980, respectively. There were
no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At October 31, 2000, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Year ended October 31, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 154,018,967 $2,664,393,856
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,923,839 494,531,040
---------------------------------------------------------------------------
181,942,806 3,158,924,896
Shares
repurchased (92,933,713) (1,582,357,234)
---------------------------------------------------------------------------
Net increase 89,009,093 $1,576,567,662
---------------------------------------------------------------------------
Year ended October 31, 1999
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 93,924,759 $1,228,849,004
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 7,629,169 93,152,893
---------------------------------------------------------------------------
101,553,928 1,322,001,897
Shares
repurchased (81,005,561) (1,056,235,434)
---------------------------------------------------------------------------
Net increase 20,548,367 $ 265,766,463
---------------------------------------------------------------------------
Year ended October 31, 2000
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 36,814,299 $ 605,449,981
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 14,162,845 238,785,562
---------------------------------------------------------------------------
50,977,144 844,235,543
Shares
repurchased (66,939,763) (1,098,583,395)
---------------------------------------------------------------------------
Net decrease (15,962,619) $ (254,347,852)
---------------------------------------------------------------------------
Year ended October 31, 1999
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 32,374,239 $ 400,904,692
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,156,972 48,885,999
---------------------------------------------------------------------------
36,531,211 449,790,691
Shares
repurchased (56,458,220) (706,424,289)
---------------------------------------------------------------------------
Net decrease (19,927,009) $(256,633,598)
---------------------------------------------------------------------------
Year ended October 31, 2000
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 5,579,732 $94,123,061
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 140,663 2,472,859
---------------------------------------------------------------------------
5,720,395 96,595,920
Shares
repurchased (1,354,039) (21,788,968)
---------------------------------------------------------------------------
Net increase 4,366,356 $74,806,952
---------------------------------------------------------------------------
For the period February 1, 1999
(commencement of operations) to
October 31, 1999
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 1,355,459 $17,881,229
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
1,355,459 17,881,229
Shares
repurchased (69,410) (924,256)
---------------------------------------------------------------------------
Net increase 1,286,049 $16,956,973
---------------------------------------------------------------------------
Year ended October 31, 2000
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 2,622,443 $44,479,069
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 514,622 8,995,590
---------------------------------------------------------------------------
3,137,065 53,474,659
Shares
repurchased (2,495,403) (41,907,225)
---------------------------------------------------------------------------
Net increase 641,662 $11,567,434
---------------------------------------------------------------------------
Year ended October 31, 1999
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 3,899,037 $49,882,997
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 121,972 1,478,302
---------------------------------------------------------------------------
4,021,009 51,361,299
Shares
repurchased (3,535,004) (45,298,074)
---------------------------------------------------------------------------
Net increase 486,005 $ 6,063,225
---------------------------------------------------------------------------
Year ended October 31, 2000
---------------------------------------------------------------------------
Class Y Shares Amount
---------------------------------------------------------------------------
Shares sold 9,277,364 $159,090,428
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,405,172 25,352,554
---------------------------------------------------------------------------
10,682,536 184,442,982
Shares
repurchased (8,492,405) (154,767,774)
---------------------------------------------------------------------------
Net increase 2,190,131 $ 29,675,208
---------------------------------------------------------------------------
Year ended October 31, 1999
---------------------------------------------------------------------------
Class Y Shares Amount
---------------------------------------------------------------------------
Shares sold 13,118,267 $174,297,460
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 181,284 2,245,769
---------------------------------------------------------------------------
13,299,551 176,543,229
Shares
repurchased (2,836,139) (37,775,199)
---------------------------------------------------------------------------
Net increase 10,463,412 $138,768,030
---------------------------------------------------------------------------
FEDERAL TAX INFORMATION
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, as amended, the
Fund hereby designates $1,011,100,965 as capital gain, for its taxable
year ended October 31, 2000.
The fund has designated 9.53% of the distributions from net investment
income as qualifying for the dividends received deduction for
corporations.
The Form 1099 you receive in January 2001 will show the tax status of
all distributions paid to your account in calendar 2000.
THE PUTNAM FAMILY OF FUNDS
The following is a complete list of Putnam's open-end mutual funds.
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.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Technology Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Fund
Balanced Retirement Fund
Classic Equity 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
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund
U.S. Government Income Trust
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
ASSET ALLOCATION 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 Growth and Income Fund II
[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 not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at
www.putnaminvestments.com.
WELCOME TO WWW.PUTNAMINVESTMENTS.COM
Now you can use your PC to get up-to-date information about your funds,
learn more about investing and retirement planning, and access market
news and economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
* the benefits of investing with Putnam
* Putnam's money management philosophy
* complete fund information, daily pricing and long-term performance
* your current account value, portfolio value and transaction history
* the latest on new funds and other Putnam news
You can also read Putnam economist Dr. Robert Goodman's commentary and
Putnam's Capital Markets outlook, search for a particular fund by name
or objective, use our glossary to decode investment terms . . . and much
more.
The site can be accessed through any of the major online services
(America Online, CompuServe, Prodigy) that offer web access. Of course,
you can also access it via Netscape or Microsoft Internet Explorer,
using an independent Internet service provider.
New features will be added to the site regularly. So be sure to bookmark us at
http://www.putnaminvestments.com
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
KPMG LLP
TRUSTEES
John A. Hill, Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam, III
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
Stephen Oristaglio
Vice President
Robert J. Swift
Vice President and Fund Manager
Lisa H. Svensson
Vice President and Fund Manager
Kelly A. Morgan
Vice President and Fund Manager
Stephen P. Dexter
Vice President and Fund Manager
Manuel Weiss Herrero
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
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 and
Putnam's Quarterly Ranking Summary. For more information or to request a
prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site:
www.putnaminvestments.com.
Not FDIC Insured, May Lose Value, No Bank Guarantee
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
---------------------
PRST STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
AN006-66564 005/882/907/513 12/00
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
----------------------------------------------------------------------------
Putnam Global Growth Fund
Supplement to annual Report dated 10/31/00
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 $150 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, C, and M shares, which are discussed more extensively in the annual
report.
ANNUAL RESULTS AT A GLANCE
----------------------------------------------------------------------------
Total return for periods ended 10/31/00
NAV
1 year 10.08%
5 years 139.37
Annual average 19.07
10 years 313.20
Annual average 15.24
Life of fund (since class A inception, 9/1/67)
Annual average 11.51
Share value: NAV
10/31/99 $15.32
10/31/00 $15.33
----------------------------------------------------------------------------
Distributions: No. Income Capital gains Total
1 -- $1.806 $1.806
----------------------------------------------------------------------------
Please note that past performance is not indicative of future results. More
recent returns may be more or less than those shown. Returns shown for
class Y shares for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect the initial
sales charge currently applicable to class A shares. These returns have not
been adjusted to reflect differences in operating expenses which, for class
Y shares, typically are lower than the operating expenses applicable to
class A shares. All returns assume reinvestment of distributions at net
asset value. 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.
