Putnam
Investors
Fund
ANNUAL REPORT
July 31, 1994
[Graphic scales]
B O S T O N * L O N D O N * T O K Y O
<PAGE>
Performance highlights
> CDA/Wiesenberger ranked the fund's class A shares in the top third of 271
long-term growth funds for 5-year performance and in the top half of 156
funds for 10 years as of 7/31/94.*
> The fund's class A shares performed better than half of the funds in
Lipper's growth fund category for 2-, 3-, 5-, and 10-year performance as of
7/31/94.(+)
> Performance should always be considered in light of a fund's investment
strategy. Putnam Investors Fund is designed for investors seeking long-term
growth from a portfolio primarily consisting of quality common stocks, as
well as any increased income resulting from this growth.
FISCAL 1994 RESULTS AT A GLANCE
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C> <C> <C> <C>
Total return: NAV POP NAV CDSC
.......................................................................................
12 months ended 7/31/94
(change in value
during period plus
reinvested distributions) 3.33 % -2.60% 2.38% -2.02 %
Share value: NAV POP NAV
.......................................................................................
7/31/93 $8.87 $ 9.41 $ 8.85
7/31/94 7.85 8.33 7.78
Long-term
Distributions: No. Income Capital gains Total
.......................................................................................
Class A 1 $0.050 $1.253 $ 1.303
Class B 1 0.023 1.253 1.276
</TABLE>
Performance data represent past results and will differ for each share class.
For performance over longer periods, see pages 8 and 9. POP assumes 5.75%
maximum sales charge. CDSC assumes 5% maximum contingent deferred sales
charge.
* CDA/Wiesenberger rankings are updated monthly, based entirely on total
return and do not take into account sales charges or fees. The fund's class A
shares ranked 289 out of 504 funds for 1-year performance, 83 out of 271 for
5 years, and 63 out of 156 for 10 years. Past performance is not indicative
of future results. Rankings for class B shares will differ.
+ Lipper Analytical Services is an independent research organization;
rankings vary over time and do not reflect the effects of sales charges. The
fund's class A shares ranked 236 out of 430 funds for 1-year performance, 72
out of 320 for 2 years, 130 out of 273 for 3 years, 63 out of 215 for 5
years, and 49 out of 125 for 10 years. Past performance is not indicative of
future results. Rankings for class B shares will differ.
<PAGE>
From the Chairman
GRAPHIC [picture of George Putnam]
(c) Karsh, Ottawa
Dear Shareholder:
A brief surge of optimism lifted financial markets worldwide as Putnam
Investors Fund reached the close of its fiscal year on July 31, 1994.
Although the rise was short- lived, it represented virtually the only sign in
many months that the markets at home and abroad recognized the fundamental
strengths of the world's major economies.
Since January, the markets have charted volatile and uncertain courses,
reacting to higher interest rates and concerns about prospects for additional
rate increases. However, the uncertainty clouding the economic environment
has masked some major structural and fundamental changes in corporate America
that have produced attractive investment opportunities. Leading economic
indicators present a positive long-term view for growth investments, although
rising interest rates could slow the pace of economic expansion more than
desired.
As we go forward, Putnam Management anticipates a more challenging investment
environment. We believe careful stock selection will continue to be the key
to successful long-term investment performance.
In the report that follows, fund managers Brooke Cobb and David Santos
discuss the fiscal year just ended and prospects for fiscal 1995.
Respectfully yours,
[signature]
George Putnam
Chairman of the Trustees
September 14, 1994
<PAGE>
Report from the fund managers
Brooke Cobb, Lead Manager and
David J. Santos
Throughout the past 12 months, Putnam Investors Fund operated in a market
environment that was anything but dull-- making the fund's total returns of
3.33% for class A shares and 2.38% for class B shares at net asset value all
the more impressive. In pursuing these returns, we considered the general
outlook for the economy, studied various industries to determine those with
the best long-term growth possibilities, and conducted a detailed study of
what appear to be the most promising individual companies.
> THE TWO FACES OF FISCAL '94
The first half of fiscal 1994--August 1, 1993, through January 31, 1994--were
characterized by moderate economic growth, low inflation, declining long-term
interest rates, and a willingness on the part of the public to invest in
long-term assets, growth stocks in particular. This scenario supported and
sustained new market highs.
The second half of fiscal 1994--February 1 through July 31, 1994--witnessed
the Federal Reserve Board's series of increases in short-term interest rates.
Although economic growth and consumer confidence remained strong, these
increases, along with a weakening dollar and growing concern about U.S.
political leadership, rattled many stock investors, sending them to the
sidelines.
Many sought the safety of Treasury bills, bank certificates of deposit, and
money market funds; others favored stocks of companies that seemed sure of
maintaining high current returns. Those who remained committed to
growth-stock investing experienced the frenzied ups and downs of stock
prices. Through it all, we continued to employ a combination of sophisticated
technology and a company-by-company research approach in our search for
quality growth stocks.
<PAGE>
> KEEPING AN EYE ON EARNINGS SURPRISES, COMPANY RESTRUCTURINGS
When analyzing potential portfolio holdings, we use Putnam Management's
proprietary computer model to identify the stocks we believe will lead to
superior price appreciation. One of the patterns we watch for in examining a
company's stock is its potential for what we call "earnings surprises." In
the midst of this spring's market turbulence, many investors overlooked this
important factor.
Earnings surprises occur when a company posts earnings that are not in line
with the estimates worked up by market analysts, either positively or
negatively. Because of the extensive cost cutting and restructuring that have
occurred in corporate America during the past few years, more than half of
the companies represented on stock exchanges registered positive earnings
surprises in the second quarter of calendar 1994. In our opinion, this
constitutes an encouraging statistic.
Approximately 55% of the companies in your fund's portfolio during fiscal
1994 reported earnings above expectations, while only about 6% reported
disappointments. The earnings of the remaining 39% were in line with
projections.
Because stock prices have declined as a result of rising interest rates, a
company that exhibits the potential for positive earnings surprises can
represent a good value for investors. When investors finally take a moment to
refocus, we believe they will recognize the solid growth potential of these
companies, which should propel their stock prices upward once again.
[Graphic Bar Chart]
Top Industry Sectors*
Technology 14.7%
Finance 12.7%
Energy-related 10.0%
Basic industrial 9.6%
Consumer-related 9.5%
Health care 7.5%
*Based on net assets on 7/31/94.
[End of bar chart]
<PAGE>
We are also focusing on companies that have effectively restructured their
operations to a point where management is buying back shares. Such purchases
by these informed buyers send out positive signals about the companies'
prospects. Corporate managers who receive stock as part of their personal
compensation packages are more likely to align their management goals with
the interests of stockholders. In addition, buybacks reduce the number of
shares outstanding, thereby increasing the value of the remaining shares.
Many companies in your fund's portfolio are currently experiencing such
buybacks.
By focusing on companies whose earnings we believe are likely to exceed the
market's expectations and by emphasizing quality growth companies that have
successfully undergone restructuring, we have positioned the fund to take
advantage of what we believe will drive the next phase of the bull
market--earnings- driven gains.
> HARVESTING PROFITS TO MAINTAIN RISK PROFILE
Several industry sectors that lagged behind the market during the first six
months of fiscal 1994 did quite well in the second half. Principal among
these were the bank and financial services industries and health care,
especially the drugs and supplies areas which benefited from consolidations.
The energy sector also strengthened as a robust recovery in oil and natural
gas prices sparked investor interest. The technology, lodging, and gaming
groups, which had produced extraordinary returns in the first six months,
were subject to relentless profit-taking by investors during the period.
One of our strategies in the management of the fund is to trim back and
realize gains on holdings as they appreciate in value. This reduces the risk
of such holdings becoming overvalued. We did this with some of the fund's
technology holdings--Oracle Systems Corp., a designer, developer, and
marketer of computer software products, and Compaq, a leading manufacturer of
IBM-compatible personal computers, for example.
<PAGE>
TOP 10 HOLDINGS (7/31/94)
General Electric Co.
Major services, technology and manufacturing company
...............................................................................
Mobil Corp.
Worldwide petroleum and chemicals company
..............................................................................
British Petroleum Co.
Major crude oil and natural gas enterprise
.............................................................................
du Pont de (E.I.) Nemours & Co.
Worldwide chemical producer
..............................................................................
Caterpillar, Inc.
World's largest manufacturer of construction machinery
..............................................................................
Johnson & Johnson
World's largest, most comprehensive health care company
..............................................................................
Coca-Cola Co.
World's largest soft-drink company
..............................................................................
Procter & Gamble Co.
Leading marketer of household and personal care products
..............................................................................
Xerox Corp.
Leading producer of copiers and office machines
..............................................................................
General Motors Corp.
World's largest manufacturer of cars and trucks
These holdings represent 19.8% of the fund's net assets. Portfolio holdings
are subject to change.
> SEEKING OPPORTUNITIES IN MARKET'S VOLATILITY
While short-term investors and those more comfortable with relatively stable
stock prices might view the current market environment with some trepidation,
we are approaching it as a buying opportunity. Over the past several months,
we have been positioning your fund's portfolio accordingly. Overall, we've
not been disappointed by earnings this year; most of the companies in which
your fund invests are doing well and showing strong earnings growth.
We believe Morningstar said it well when it stated in its March 18, 1994,
writeup of your fund that "[Fund Manager] Cobb's slightly cautious
earnings-driven investing has worked well for the past five years. While the
fund's trailing three-year returns were weakened by a relatively slow 1991,
the fund has still provided investors with returns commensurate with the
risks that it takes."
The views expressed throughout the report are exclusively those of Putnam
Management. They are not meant as investment advice. There is no guarantee
that the fund will continue to hold the securities discussed in the future.
<PAGE>
Performance summary
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares changed
over time, assuming you held the shares through the entire period and
reinvested all distributions back into the fund. We show total return in two
ways: on a cumulative long- term basis and on average how the fund might have
grown each year over varying periods. For comparative purposes, we show how
the fund performed relative to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDED 7/31/94
<TABLE>
<CAPTION>
Standard
Class A Class B & Poor's(R)
NAV POP NAV CDSC 500 Index CPI
<S> <C> <C> <C> <C> <C> <C>
1 year 3.33% -2.60% 2.38% -2.02% 5.19% 2.77%
5 years 60.92 51.71 -- -- 54.69 19.29
Annual average 9.98 8.69 -- -- 9.12 3.59
10 years 279.77 257.80 -- -- 326.18 42.56
Annual average 14.28 13.60 -- -- 15.60 3.61
Life of class B -- -- 9.50 5.76 7.80 3.70
Annual average -- -- 6.60 4.02 5.43 2.59
</TABLE>
TOTAL RETURN FOR PERIODS ENDED 6/30/94
(most recent calendar quarter)
<TABLE>
<CAPTION>
Class A Class B
NAV POP NAV CDSC
<S> <C> <C> <C> <C>
1 year 0.32% -5.43% -0.63% -4.90%
5 years 70.25 60.45 -- --
Annual average 11.23 9.92 -- --
10 years 265.45 244.51 -- --
Annual average 13.84 13.17 -- --
Life of class B -- -- 6.40 2.77
Annual average -- -- 4.78 2.07
</TABLE>
Fund performance data do not take into account any adjustment for taxes
payable on reinvested distributions or, for class A shares, distribution fees
prior to implementation of the class A distribution plan in 1990. Effective
3/1/93, the fund began offering class B shares. Performance of share classes
will differ. Performance data represent past results. Investment returns and
net asset value will fluctuate so an investor's shares, when sold, may be
worth more or less than their original cost.
<PAGE>
[Line Graph] Growth of a $10,000 Investment
Cumulative total return of a $10,000 investment since 8/1/84
(Insert starting number) (Insert ending Total)
$9,425 Fund Class A shares at POP $35,780
$10,000 Competitive Index (S&P 500) $42,618
$10,000 Consumer Price Index $14,256
(Plot points for 10-year total return mountain chart)
Date/year Fund at POP S&P 500 CPI
7/31/84 9425 10000 10000
7/31/85 12243 13239 10355
7/31/86 15605 16990 10519
7/31/87 20454 23676 10932
7/31/88 17463 20904 11383
7/31/89 22235 27550 11950
7/31/90 24526 29308 12526
7/31/91 27793 33059 13084
7/31/92 29041 37278 13497
7/31/93 34628 40516 13871
7/31/94 35780 42618 14256
[End line graph]
Past performance is no assurance of future results. A $10,000 investment in
the fund's class B shares at inception (3/1/93) would have grown to $10,950
by 7/31/94 ($10,576 with a redemption at the end of the period). All data as
of 7/31.
TERMS AND DEFINITIONS
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 data shown here
assume the maximum 5.75% sales charge.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year to
1% during the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
Standard & Poor's(R) 500 Index is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance. The index
assumes reinvestment of all distributions and does not take into account
brokerage commissions or other costs. The fund's portfolio contains
securities that do not match those in the index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
<PAGE>
Life cycle investing
As we move through life, our investment needs change. As these needs change,
so does the way we allocate our assets. Here are some basic rules for setting
up and maintaining an investment program and some examples of how assets
might be allocated.
> DETERMINE YOUR INVESTMENT OBJECTIVES.
Objectives may include a new home, college education expenses, or retirement.
> EVALUATE YOUR RISK TOLERANCE.
Generally, risk tolerance is higher for younger investors with longer
timelines and lower for older investors who may depend on their investment
for current income.
> ALLOCATE YOUR INVESTABLE SAVINGS.
Your investment advisor will help you determine how much of your investable
dollars should be allocated to each investment category.
> CHOOSE THE APPROPRIATE PUTNAM FUNDS.
Using Putnam's free exchange privilege, you can adjust your own Putnam
portfolio of funds as your financial needs change-- without a service fee.*
Look at the facing page for some ways you can allocate your assets, then turn
the page to see how the Putnam Fund Selector can help you make your choices.
*Putnam reserves the right to change or terminate the exchange privilege. In
some cases, a sales charge may apply. See prospectus for details.
<PAGE>
Four ways to allocate assets
[Four Pie Charts]
SEEKING MAXIMUM GROWTH
Risk tolerance:
Generally
investors with a
higher risk
tolerance
(often in their 20s
and early 30s.)
30%-40% Growth and Income
40%-50% Growth
5%-20% Income or Tax-Free Income
SEEKING GROWTH AND SOME INCOME
Risk tolerance:
Generally
investors with a
high to moder-
ate risk toler-
ance (often in
their late 30s
and early 40s.)
30%-40% Growth and Income
30%-40% Growth
10%-30% Income or Tax-Free Income
SEEKING INCOME AND SOME GROWTH
WITH PROTECTION AGAINST INFLATION
Risk tolerance:
Generally
investors with a
moderate risk
tolerance (often
in their late 40s
and 50s.)
30%-40% Growth and Income
10%-20% Growth
25%-60% Income or Tax-Free Income
SEEKING HIGH CURRENT INCOME AND
PROTECTION AGAINST INFLATION
Risk tolerance:
Generally
investors with
a moderate
to low risk
tolerance
(often over 60
and retired)
20%-30% Growth and Income
5%-10% Growth
40%-70% Income or Tax-Free Income
[end 4 pie charts]
<PAGE>
The Putnam Fund Selector(tm)
The Putnam Fund Selector shows the many opportunities for investors within
every investment strategy. All investors should first accumulate a base of
conservative, cash-equivalent investments. Then, with the help of your
investment advisor, diversify your portfolio by investing in the Putnam
Family of Funds.
[Graphic Pyramid]
Risk/Reward
Putnam Growth Funds
Putnam Growth and Income Funds
Putnam Income or Tax-Free Funds
Most Conservative Investments
[End Graphic Pyramid]
<PAGE>
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Health Sciences Trust
Investors Fund
Natural Resources Fund*
New Opportunities Fund
OTC Emerging Growth Fund
Overseas Growth Fund
Vista Fund
Voyager Fund
PUTNAM GROWTH
AND INCOME FUNDS
Convertible Income-Growth Trust
Dividend Growth Fund
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Managed Income Trust
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund
American Government Income Fund
Balanced Government Fund
Corporate Asset Trust
Diversified Income Trust
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Intermediate Tax Exempt Income Fund
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds+
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio, and Pennsylvania
LIFESTAGE(SM) FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments to help
maximize your return and reduce your risk.
The three portfolios:
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Putnam Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS++
Putnam money market funds:
Money Market Fund+++
California Tax Exempt Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts**
*Formerly Energy-Resources Trust
+Not available in all states.
++Relative to above.
+++Formerly Putnam Daily Dividend Trust.
**Not offered by Putnam Investments. Certificates of deposit offer a fixed
rate of return and may be insured, up to certain limits, by federal/state
agencies. Savings accounts may also be insured up to certain limits.
Please call your financial advisor or Putnam to obtain a prospectus for any
Putnam fund. It contains more complete information, including charges and
expenses. Read it carefully before you invest or send money.
<PAGE>
Report of Independent Accountants
For the fiscal year ended July 31, 1994
To the Trustees and Shareholders of
Putnam Investors Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Investors Fund, including the portfolio of investments owned, as of
July 31, 1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended, and the "Financial Highlights" for each of the five
years in the period then ended, for the seven month period ended July 31,
1989 and for each of the four years in the period ended December 31, 1988 for
class A shares and for the year ended July 31, 1994 and for the period March
1, 1993 (commencement of operations) to July 31, 1993 for class B shares.
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.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 July 31, 1994, by correspondence with the custodian
and brokers. 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 Investors Fund as of July 31, 1994, and the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the "Financial Highlights" for each of
the five years in the period then ended, for the seven month period ended
July 31, 1989 and for each of the four years in the period ended December 31,
1988, for class A shares and for the year ended July 31, 1994 and for the
period March 1, 1993 (commencement of operations) to July 31, 1993 for class
B shares in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
September 22, 1994
<PAGE>
Portfolio of investments owned
July 31, 1994
COMMON STOCKS (94.3%)(a)
NUMBER OF SHARES VALUE
Technology (14.7%)
220,000 Applied Materials, Inc. (c) $9,845,000
249,400 Cisco Systems, Inc. (c) 5,237,400
240,000 Compaq Computer Corp. (c) 7,590,000
235,000 Computer Associates International,
Inc. 9,135,625
415,000 DSC Communications Corp. (c) 10,167,500
535,000 EMC Corp. (c) 7,958,125
230,000 General Motors Corp. Class E 8,107,500
230,000 Motorola, Inc. 12,190,000
210,000 Oracle Systems Corp. (c) 8,032,500
140,000 Paychex, Inc. 4,690,000
468,100 Silicon Graphics Inc. (c) 11,058,863
145,000 Texas Instruments, Inc. 11,400,625
130,000 Xerox Corp. 13,292,500
118,705,638
Finance (12.7%)
135,000 American International Group, Inc. 12,723,750
210,000 Chase Manhattan Corp. 7,743,750
260,000 Dean Witter, Discover & Co. 10,432,500
120,000 Federal National Mortgage Assn. 10,410,000
100,000 First Interstate Bancorp 7,512,500
250,000 Fleet Financial Group, Inc. 9,031,250
200,000 NationsBank Corp. 11,150,000
210,000 Transamerica Corp. 10,657,500
340,000 Travelers, Inc. 11,262,500
75,000 Wells Fargo & Co. 11,653,125
102,576,875
Energy-Related (10.0%)
150,000 Anadarko Petroleum Corp. 7,181,250
220,000 British Petroleum Co. PLC ADR (b) 16,720,000
390,000 Enron Corp. 12,626,250
150,000 Fluor Corp. 8,175,000
205,000 MCN Corp. 8,174,375
225,000 Mobil Corp. 18,871,875
279,200 Williams Cos., Inc. 9,108,900
80,857,650
Basic Industrial Products (9.6%)
130,000 Armstrong World Industries, Inc. 6,402,500
145,000 Caterpillar Inc. 15,714,375
270,000 duPont (E.I.) de Nemours & Co., Ltd. 16,031,250
105,000 Hercules Inc. 11,208,750
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
Basic Industrial Products (continued)
135,000 Monsanto Co. $10,378,125
205,000 PPG Industries Inc. 8,020,625
200,000 Whirlpool Corp. 10,175,000
77,930,625
Consumer Related (9.5%)
490,000 Dial Corp. (The) 10,106,250
250,000 Eastman Kodak Co. 12,093,750
190,000 Philip Morris Cos., Inc. 10,450,000
300,000 Premark International, Inc. 12,562,500
255,900 Procter & Gamble Co. 14,266,425
79,700 Promus Cos., Inc. (c) 2,311,300
300,000 Sysco Corp. 7,087,500
510,000 Wendy's International, Inc. 7,841,250
76,718,975
Health Care (7.5%)
250,000 Columbia/HCA Healthcare Corp. 10,125,000
330,000 Johnson & Johnson 15,510,000
100,000 Medtronic, Inc. 8,912,500
215,000 U.S. Healthcare Inc. 8,143,125
180,000 United Healthcare Corp. 8,190,000
150,000 Warner-Lambert Co. 9,750,000
60,630,625
Retail (5.4%)
435,000 Federated Department Stores Inc.
(c) 8,863,125
285,000 Lowe's Cos., Inc. 10,260,000
362,500 Office Depot, Inc. (c) 7,657,813
215,000 Penney (J.C.) Co., Inc. 10,642,500
155,000 Tandy Corp. 5,793,125
43,216,563
Communications (5.1%)
150,000 American Telephone & Telegraph
Co. 8,193,750
290,000 Ameritech Corp. 11,890,000
135,000 BellSouth Corp. 8,437,500
350,000 Sprint Corp. 12,818,750
41,340,000
Conglomerates (4.8%)
220,000 Allied-Signal Inc. 8,415,000
430,000 General Electric Co. 21,661,250
100,000 ITT Corp. 8,575,000
38,651,250
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES VALUE
<S> <C> <C>
Automotive (4.7%)
175,000 Chrysler Corp. $8,421,875
150,000 Eaton Corp. 7,781,250
250,000 General Motors Corp. 12,843,750
205,000 Magna International, Inc. 8,507,500
37,554,375
Broadcasting (4.0%)
40,000 CBS Inc. 12,480,000
160,000 Gannett Co., Inc. 8,080,000
490,000 Tele-Communications, Inc. Class A (c) 11,423,125
31,983,125
Aerospace and Defense (2.5%)
90,000 McDonnell Douglas Corp. 10,170,000
275,000 Rockwell International Corp. 9,865,625
20,035,625
Transportation (2.0%)
155,000 Burlington Northern Inc. 8,060,000
125,000 Federal Express Corp. (c) 8,312,500
16,372,500
Food and Beverages (1.8%)
335,000 Coca-Cola Co. 14,865,625
Total Common Stocks
(cost $691,204,823) $761,439,451
SHORT-TERM INVESTMENTS (5.2%)(a)
PRINCIPAL AMOUNT
$10,000,000 Ford Motor Credit Co. 4.25s, August 8, 1994 $9,991,736
20,000,000 Student Loan Marketing Association, 4.35s, September
9, 1994 19,905,750
12,324,000 Interest in $530,000,000 joint repurchase agreement
dated July 29, 1994 with Bankers Trust New York Corp.
due August 1, 1994 with respect to various U.S.
Treasury obligations--maturity value of $12,328,313
for an effective yield of 4.2% 12,328,313
Total Short-Term Investments
(cost $42,225,799) $42,225,799
Total Investments
(cost $733,430,622)(d) $803,665,250
</TABLE>
<PAGE>
NOTES
(a) Percentages indicated are based on net assets of $807,150,641, which
correspond to a net asset value per class A share and class B share of $7.85
and $7.78, respectively.
(b) ADR after the name of a foreign holding stands for American Depository
Receipt, representing ownership of a foreign security on deposit with a
domestic custodian bank.
(c) Non-income-producing security.
(d) The aggregate identified cost for federal income tax purposes is
$734,403,060 resulting in gross unrealized appreciation and depreciation of
$91,700,509 and $22,438,319 respectively, or net unrealized appreciation of
$69,262,190.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of assets and liabilities
July 31, 1994
<TABLE>
Assets
<S> <C>
Investments in securities, at value (identified cost $733,430,622) (Note 1) $ 803,665,250
Cash 309
Dividends and other receivables 923,355
Receivable for securities sold 9,642,079
Receivable for shares of the fund sold 645,162
Total assets 814,876,155
Liabilities
Payable for securities purchased $ 4,863,010
Payable for shares of the fund repurchased 566,198
Payable for compensation of Manager (Note 2) 1,243,739
Payable for administrative services (Note 2) 5,312
Payable for investor servicing and custodian fees (Note 2) 266,098
Payable for distribution fees (Note 2) 182,052
Other accrued expenses 599,105
Total liabilities 7,725,514
Net assets $ 807,150,641
Represented by
Paid-in capital (Note 4) $ 676,302,446
Accumulated net realized gain on investments 60,613,567
Net unrealized appreciation of investments 70,234,628
Total--Representing net assets applicable to capital shares outstanding $ 807,150,641
Computation of net asset value and offering price
Net asset value and redemption price of class A shares
($786,117,603 divided by 100,081,708 shares) $ 7.85
Offering price per share (100/94.25 of $7.85)* $ 8.33
Net asset value and offering price of class B shares
($21,033,038 divided by 2,704,182 shares)+ $ 7.78
</TABLE>
*On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of operations
Year ended July 31, 1994
Investment income:
Dividends (net of foreign tax of $30,445) $ 14,016,593
Interest 1,534,942
Total investment income 15,551,535
Expenses:
Compensation of Manager (Note 2) $ 5,077,956
Investor servicing and custodian fees (Note 2) 916,714
Compensation of Trustees (Note 2) 25,046
Auditing 20,935
Legal 22,140
Postage 62,881
Administrative services (Note 2) 16,083
Distribution fees--Class A (Note 2) 2,041,310
Distribution fees--Class B (Note 2) 120,924
Registration fees 8,235
Other 18,230
Total expenses 8,330,454
Net investment income 7,221,081
Net realized gain on investments (Notes 1 and 3) 81,316,015
Net unrealized depreciation of investments during the year (62,307,377)
Net gain on investments 19,008,638
Net increase in net assets resulting from operations $ 26,229,719
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of changes in net assets
<TABLE>
<CAPTION>
Year ended
July 31
1994 1993
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 7,221,081 $ 6,357,040
Net realized gain on investments 81,316,015 111,724,397
Net unrealized appreciation (depreciation) of investments and
options (62,307,377) 14,756,155
Net increase in net assets resulting from operations 26,229,719 132,837,592
Undistributed net investment income included in price of shares
sold and repurchased, net -- (167)
Distributions to shareholders:
From net investment income
Class A (4,369,792) (3,780,141)
Class B (32,475) --
In excess of net investment income
Class A -- (2,557,261)
Class B -- (10,014)
From net realized gain on investments
Class A (112,980,631) (93,694,625)
Class B (984,230) --
Increase (decrease) from capital share
transactions (Note 4) 89,767,566 62,246,144
Total increase (decrease) in net assets (2,369,843) 95,041,528
Net assets
Beginning of year 809,520,484 714,478,956
End of year (including distributions in excess of net investment
income of $0 and $2,567,442, respectively) $ 807,150,641 $809,520,484
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
March 1, 1993
(commence-
Year ment of
ended operations) to
July 31 July 31
Class B
1994 1993 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.85 $8.32 $8.87 $8.57 $9.20
Investment Operations
Net Investment Income (Loss) .03 (.03) .06 .08 .12
Net Realized and Unrealized Gain (Loss) on
Investments .21 .61 .26 1.45 .21
Total from Investment Operations .24 .58 .32 1.53 .33
Distributions to Shareholders
From Net Investment Income (.02) -- (.05) (.04) (.15)
In Excess of Net Investment Income -- (.05) -- (.03) --
From Net Realized Gain on Investments (1.29) -- (1.29) (1.16) (.81)
Total Distributions (1.31) (.05) (1.34) (1.23) (.96)
Net Asset Value,
End of Period $7.78 $8.85 $7.85 $8.87 $8.57
Total Investment Return
at Net Asset Value (%)(b) 2.38 6.96(a) 3.33 19.24 4.49
Net Assets, End of Period
(in thousands) $21,033 $4,789 $786,118 $804,731 $714,479
Ratio of Expenses to Average
Net Assets(%) 1.77 .73(a) .99 .90 .94
Ratio of Net Investment Income (Loss) to Average
Net Assets (%) .08 (.12)(a) .88 .84 1.33
Portfolio Turnover (%) 100.16 134.14(a) 100.16 134.14 100.26
</TABLE>
(a) Not annualized.
(b) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
<PAGE>
<TABLE>
<CAPTION>
Year
ended Seven months
July 31 ended July 31 Year ended December 31
Class A
1991 1990 1989 1988 1987 1986 1985 1984
<C> <C> <C> <C> <C> <C> <C> <C>
$8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84 $11.42
.15 .22 .17 .13 .15 .23 .25 .21
.89 .63 1.71 .36 .57 1.46 2.52 (.35)
1.04 .85 1.88 .49 .72 1.69 2.77 (.14)
(.17) (.29) (.08) (.15) (.27) (.20) (.20) (.20)
- -- -- -- -- -- -- -- --
(.42) (.54) -- -- (5.48) (1.77) (.51) (1.24)
(.59) (.83) (.08) (.15) (5.75) (1.97) (.71) (1.44)
$9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84
13.32 10.31 27.27(a) 7.48 4.00 15.74 29.20 0.15
$739,775 $704,189 $699,176 $609,631 $765,538 $969,073 $1,075,052 $1,015,855
.89 .81 .46(a) .68 .61 .49 .51 .51
1.78 2.42 2.13(a) 1.84 1.48 2.00 2.33 2.19
58.30 51.47 31.96(a) 82.20 83.57 119.59 79.25 53.21
</TABLE>
<PAGE>
Notes to financial statements
July 31, 1994
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. The fund seeks
long-term growth of capital and any increased income that results from this
growth by investing primarily in a portfolio consisting of quality common
stocks.
The fund offers both class A and class B shares. The fund commenced its
public offering of class B shares on March 1, 1993. Class A shares are sold
with a maximum front-end sales charge of 5.75%. Class B shares do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than class
A shares, and are subject to a contingent deferred sales charge if those
shares are redeemed within six years of purchase. In addition, the Trustees
declare separate dividends on each class of shares. Each class bears expenses
unique to that class (including the distribution fees applicable to such
class) and votes as a class only with respect to its own distribution plan or
other matters on which a class vote is required by law or determined by the
Trustees. All other expenses of the fund are borne pro-rata by the
shareholders of both classes of shares. Shares of each class would receive
their pro-rata share of the net assets of the fund if the fund were
liquidated.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or, if no sales are reported--as in the case of some
securities traded over-the-counter--the last reported bid price, except that
certain U.S. government obligations are stated at the mean between the last
reported bid and asked prices. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value, and other investments are stated at fair value
following procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account, along with the cash of other
registered investment companies managed by Putnam Investment Management, Inc.
("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of
Putnam Investments, Inc. and certain other accounts. These balances may be
invested in one or more repurchase agreements and/or short-term money market
instruments.
C) Repurchase agreements The fund or any joint trading account, through its
custodian, receives delivery of the underlying securities, the market value
of which at the time of purchase is required to be an amount at least equal
to the resale price, including accrued interest. The fund's Manager is
responsible for determining that the value of these underlying securities is
at all times at least equal to the resale price, including accrued interest.
D) Security transactions and related investment income Security transactions
are accounted for on the
<PAGE>
trade date (date the order to buy or sell is executed). Interest income is
recorded on the accrual basis and dividend income is recorded on the
ex-dividend date, except that certain dividends from foreign securities are
recorded as soon as the fund is informed of the ex-dividend date.
E) Option accounting principles When the fund writes a call or put option, an
amount equal to the premium received by the fund is included in the fund's
"Statement of assets and liabilities" as an asset and an equivalent
liability. The amount of the liability is subsequently "marked-to-market" to
reflect the current market value of the option written. The current market
value of an option is the last sale price or, in the absence of a sale, the
last offering price. If an option expires on its stipulated expiration date,
or if the fund enters into a closing purchase transaction, the fund realizes
a gain (or loss if the cost of a closing purchase transaction exceeds the
premium received when the option was written) without regard to any
unrealized gain or loss on the underlying security, and the liability related
to such option is extinguished. If a written call option is exercised, the
fund realizes a gain or loss from the sale of the underlying security and the
proceeds of the sale are increased by the premium originally received. If a
written put option is exercised, the amount of the premium originally
received reduces the cost of the security that the fund purchases upon
exercise of the option.
The fund writes covered call options; that is, options for which it holds the
underlying security or its equivalent. Accordingly, the risk in writing a
call option is that the fund relinquishes the opportunity to profit if the
market price of the underlying security increases and the option is
exercised. In writing a put option, the fund assumes the risk of incurring a
loss if the market price of the underlying security decreases and the option
is exercised.
The premium paid by the fund for the purchase of a call or put option is
included in the fund's "Statement of assets and liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of
the option. The current market value of a written option is the last sale
price or, if no sales are reported, the last bid price. If an option which
the fund has purchased expires on the stipulated expiration date, the fund
realizes a loss in the amount of the cost of the option. If the fund enters
into a closing sale transaction, the fund realizes a gain or loss, depending
on whether the proceeds from the closing sale transaction are greater or less
than the cost of the option. If the fund exercises a purchased call option,
the cost of the security that the fund purchases upon exercise will be
increased by the premium originally paid. If the fund exercises a put option,
it realizes a gain or loss from the sale of the underlying security and the
proceeds from such sale are decreased by the premium originally paid.
Stock index options are similar to options on individual securities in that
the purchaser of an index option acquires the right to buy, and the writer
undertakes the obligation to sell, an index at a stated exercise price during
the term of the option. Instead of giving the right to take or make actual
delivery of securities, the holder of a stock index option has the right to
receive a cash "exercise settlement amount." This amount is equal to the
amount by which the fixed exercise price of the option exceeds (in the case
of a put) or is less than (in the case of a call) the closing value of the
underlying index on the date of the exercise, multiplied by a fixed "index
multiplier." The fund writes options on stocks indices only to the extent
that it holds in its portfolio underlying securities, which, in the judgment
of Putnam Management, correlate closely with the stock index.
<PAGE>
F) Federal taxes It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
G) Distributions to shareholders Distributions to shareholders are recorded
by the fund on the ex-dividend date.
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. The differences include treatment of wash
sales. 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 July 31, 1994,
the fund reduced undistributed net investment income by $2,818,815 and
increased accumulated net realized gains by $2,818,815.
H) Equalization Prior to August 1, 1993, the fund used the accounting
practice known as equalization to keep a continuing shareholder's per share
interest in undistributed net investment income unaffected by sales or
repurchases of fund shares. This was accomplished by allocating a per share
portion of the proceeds from sales and the costs of repurchases of shares to
undistributed net investment income.
As of August 1, 1993, the fund discontinued using equalization. This change
has no effect on the fund's total net assets, net asset value per share, or
its net increase (decrease) in net assets resulting from operations.
Discontinuing the use of equalization will result in simpler financial
statements. The cumulative effect of the change was to decrease undistributed
net investment income and increase paid-in capital previously reported
through July 31, 1993 by $1,281,697.
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 for
the quarter. Such fee is based on the following annual rates: 0.65% of the
first $500 million of average net assets, 0.55% of the next $500 million,
0.50% of the next $500 million, and 0.45% of any amount over $1.5 billion,
subject, under current law, to reduction in any year to the extent that
expenses (exclusive of distribution fees, brokerage, interest and taxes) of
the fund exceed 2.5% of the first $30 million of average net assets, 2.0% of
the next $70 million and 1.5% of any amount over $100 million and by the
amount of certain brokerage commissions and fees (less expenses) received by
affiliates of the Manager on the fund's portfolio transactions.
The fund also reimburses the Manager for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees. For the year ended
July 31, 1994, the fund paid $16,083 for these services.
Trustees of the fund receive an annual Trustee's fee of $1,480 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
<PAGE>
Custodial functions for the fund 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.
Fees paid for these investor servicing and custodial functions for the year
ended July 31, 1994 amounted to $916,714.
Investor servicing and custodian fees reported in the Statement of operations
for the year ended July 31, 1994, have been reduced by credits allowed by
PFTC.
The fund has adopted a distribution plan with respect to class A shares (the
"Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940. The purpose of the Class A Plan is to compensate Putnam Mutual Fund
Corp., a wholly-owned subsidiary of Putnam Investments, Inc., for services
provided and expenses incurred by it in distributing class A shares. The
Trustees have approved payment by the fund to Putnam Mutual Funds Corp., at
an annual rate of 0.25% of the fund's average net assets attributable to
class A shares. For the year ended July 31, 1994, the Fund paid $2,041,310 in
distribution fees for class A shares.
During the year ended July 31, 1994, Putnam Mutual Funds Corp., acting as the
underwriter, received net commissions of $105,172 from the sale of class A
shares of the fund.
A deferred sales charge of up to 1.00% is assessed on certain redemptions of
class A shares repurchased as part of an investment of $1 million or more.
For the year ended July 31, 1994 Putnam Mutual Funds Corp., acting as the
underwriter, received $367 in contingent deferred sales charges on such
redemptions.
The fund has adopted a distribution plan with respect to its class B shares
(the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act
of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds
Corp. for services provided and expenses incurred by it in distributing class
B shares. The Class B Plan provides for payments by the fund to Putnam Mutual
Funds Corp., at an annual rate of 1.00% of the fund's average net assets
attributable to class B shares. For the year ended July 31, 1994, the fund
paid Putnam Mutual Funds Corp. distribution fees of $120,924 for class B
shares.
Putnam Mutual Funds Corp. also receives the proceeds on the contingent
deferred sales charges on its class B shares redemptions within six years of
purchase. The charge is based on declining rates, which begin at 5.00% of the
net asset value of the redeemed shares. For the year ended July 31, 1994
Putnam Mutual Funds Corp., acting as the underwriter, received $15,277
contingent deferred sales charges from redemptions.
Note 3
Purchases and sales of securities
During the year ended July 31, 1994, purchases and sales of investment
securities other than short-term investments aggregated $788,236,918 and
$781,607,748, respectively. In determining the net gain or loss on securities
sold, the cost of securities has been determined on the identified cost
basis.
Note 4
Capital shares
At July 31, 1994, there was an unlimited number of shares of beneficial
interest authorized divided into two classes, class A and class B capital
stock. Transactions in capital shares were as follows:
<PAGE>
<TABLE>
<CAPTION>
Year ended July 31
1994 1993
Class A Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 15,965,560 $ 134,134,981 18,086,945 $ 154,013,159
Shares issued in connection
with reinvestment of
distributions 12,359,923 98,632,189 10,130,304 82,418,276
28,325,483 232,767,170 28,217,249 236,431,435
Shares repurchased (18,934,053) (160,594,096) (20,888,070) (178,897,154)
Portion represented by
undistributed net investment
income -- -- -- 403
Net increase 9,391,430 $ 72,173,074 7,329,179 $ 57,534,684
</TABLE>
<TABLE>
<CAPTION>
March 1, 1993
(commencement of
Year ended operations)
July 31, 1994 to July 31, 1993
Class B Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 3,759,392 $ 31,677,177 672,847 $ 5,864,961
Shares issued in connection
with reinvestment of
distributions 117,975 939,081 1,143 9,724
3,877,367 32,616,258 673,990 5,874,685
Shares repurchased (1,714,371) (15,021,766) (132,804) (1,162,990)
Portion represented by
undistributed net investment
income -- -- -- (235)
Net increase 2,162,996 $ 17,594,492 541,186 $ 4,711,460
</TABLE>
Note 5
Reclassification of Capital Accounts
Effective August 1, 1993, Putnam Investors Fund has adopted the provisions of
Statement of Position 93-2 "Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital Distributions by
Investments Companies (SOP)". The SOP requires the Fund to report the
undistributed net investment income (accumulated loss) and accumulated net
realized gain (loss) accounts in such a manner as to approximate amounts
available for future tax distributions (or to offset future taxable realized
capital gains).
In implementing the SOP, the fund has reclassified $3,849,140 to increase
undistributed net investment income and $16,694,905 to increase accumulated
net realized gain with a net decrease of $20,544,045 to paid-in capital.
These adjustments represent the cumulative amounts necessary to report these
balances on a tax basis through July 31, 1993.
<PAGE>
Federal tax information
For the fiscal year ended July 31, 1994, the fund made per share
distributions of $0.05 and $0.023 for class A and class B, respectively from
net investment income constituting "dividend income" for federal income tax
purposes. The fund has designated 100% of the investment income as qualifying
for the dividend-received deductions for corporations.
In addition, the fund paid per share long-term capital gains of $1.253 for
both class A and class B, taxable as "capital gains" for federal income tax
purposes.
The Form 1099 you will receive in January 1995 will show you the tax status
of all distributions paid to your account in calendar year 1994. If you are a
shareholder in an IRA or other tax- sheltered retirement plan, this statement
is for information only and will serve as a record of distributions
reinvested in your account during the fiscal year.
As required by law, your fund reports to the Internal Revenue Service on a
calendar year basis the amount of distributions paid to each shareholder.
<PAGE>
Our commitment to quality service
> CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal every
year since the award's 1990 inception. DALBAR, an independent research firm,
ran more than 10,000 tests of 38 shareholder service components. In every
category, Putnam outperformed the industry standard.
> HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as $25 a month from
a Putnam fund or from your own checking or savings account.*
> SWITCH FUNDS EASILY.
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or
termination.)
> ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day at the
then-current net asset value, which may be more or less than their original
cost.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative.
> To make an additional investment in this or any other Putnam fund, contact
your financial advisor or call our toll-free number: 1-800-225-1581.
*Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to
continue purchasing shares during periods of low price levels.
<PAGE>
Fund information
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT
ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman
William Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Brooke Cobb
Vice President and Fund Manager
David J. Santos
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Investors 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.
<PAGE>
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
003/307-13755
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
