(logo)
Putnam
Investors
Fund
Semiannual Report
January 31, 1994
(artwork)
For investors seeking long-term growth of capital mainly through
quality common stocks, as well as any increased income resulting
from this growth
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
7 Portfolio of investments owned
9 Financial statements
18 Fund performance supplement
19 Your Trustees
A member
of the Putnam
Family of Funds
<PAGE>
How your
fund performed
For periods ended January 31, 1994
Total return* Fund S&P Consumer
Class A Class B 500 Price
NAV POP NAV CDSC Index Index
6 months 10.96% 4.60% 10.27% 5.54% 8.94% 1.24%
1 year 18.85 11.99 -- -- 12.79 2.53
5 years 105.68 93.90 -- -- 89.75 20.73
annualized 15.51 14.16 -- -- 13.67 3.84
10 years 289.32 266.90 -- -- 316.74 43.48
annualized 14.56 13.88 -- -- 15.34 3.68
+Life-of-class
(class B shares) -- -- 17.94 12.94 11.64 2.17
Share data Class A Class B
NAV POP NAV
July 31, 1993 $8.87 $9.41 $8.85
January 31, 1994 $8.43 $8.94 $8.38
Distributions
6 months ended Investment Capital gains
January 31, 1994 Number income Short-term Long-termTotal
Class A 1 $0.050 $0.277 $1.010 $1.337
Class B 1 $0.023 $0.277 $1.010 $1.310
Total return at end of most recent calendar quarter
Periods ended December 31, 1993
Class A Class B
NAV POP NAV CDSC
1 year 17.87% 11.05% -- --
5 years 112.88 100.72 -- --
annualized 16.31 14.95 -- --
10 years 256.40 235.82 -- --
annualized 13.55 12.88 -- --
+Life-of-class
(class B shares) -- -- 14.43% 9.54%
*Performance data represent past results. Investment return and
net asset value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
+Effective March 1, 1993, the fund began offering class B shares.
Performance for each share class will differ.
<PAGE>
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions. It may be shown at net asset value or at
public offering price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any 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.
Contingent deferred sales charge (CDSC) is a charge applied at
the time of the redemption of shares rather than the time of
purchase. It generally declines and eventually disappears over a
stated period.
Class A shares are the shares of your fund offered subject to an
initial sales charge. Your fund's POP includes the maximum 5.75%
sales charge.
Class B shares are the shares of your fund offered with no
initial sales charge. Within the first six years of purchase,
they are subject to a CDSC declining from 5% to 1%. After the
sixth year, the CDSC no longer applies.
Please see the fund performance supplement on page 18 for
additional information about performance comparisons.
<PAGE>
From the
Chairman
(photograph of George Putnam)
C Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
A broad-based, conservative growth approach to stock market
investing continues to produce attractive results for Putnam
Investors Fund. For the six-month period ended January 31, l994,
your fund outperformed the stock market as measured by the S&P
500. See the facing page for details.
Investing in a mutual fund backed by the size and stature of a
company like Putnam has many merits. One of the greatest
advantages is our ability to supply our management team with
innovative tools for high-quality, in-depth research. For
example, in selecting stocks for your fund, portfolio manager
Brooke Cobb uses a combination of sophisticated technology and
fundamental analysis. He first uses a proprietary computer model
to identify what he believes are the best growth stocks. The
model screens stocks for characteristics which have,
historically, led to superior price appreciation. Our analysts
are then able to focus on highly ranked stocks and quickly
respond to attractive situations. It is this kind of review and
evaluation that we believe gives your fund an edge over its
competitors.
Over the past several months, the stock market has reached one
new high after another, and this has prompted an increase in
investor concern. After all, we cannot expect such growth trends
to continue indefinitely. However, while the market is often
volatile in the short term, historic data shows that stocks tend
to outperform most other investments and inflation over the long
term. Although past performance is no guarantee of future
results, your fund is designed to provide conservative investors
with consistent, long-term growth and some degree of safety. We
believe that Brooke's careful portfolio choices will continue to
serve you well in the future -- just as they have done in the
past.
Respectfully yours,
George Putnam
March 16, 1994
<PAGE>
Report from
Putnam Management
Top 10 holdings
General Motors Corp.
(includes Common & Class E)
General Electric Co.
Chevron Corp.
Mobil Corp.
Sears, Roebuck & Co.
Merck & Co., Inc.
Caterpillar, Inc.
Motorola, Inc.
Chrysler Corp.
Whirlpool Corp.
Reflects 19.2% of the portfolio, based on net assets as of
1/31/94. Future holdings will vary.
Double-digit total returns for both class A and B shares, based
on net asset value, enabled Putnam Investors Fund to complete the
semiannual period ended January 31, l994 well ahead of the
market, as represented by the Standard & Poor's 500 Index.
Looking further back, we are pleased to note that this superior
performance trend also stretches back through both the one- and
five-year periods ended as of the same date.
A stronger economy is taking hold While economic growth was
relatively lackluster for most of l993, the final two months of
the year showed increased gains in three key areas: consumer
spending, capital investment and manufacturing output.
Furthermore, consumer confidence rose to its highest level since
the Persian Gulf War victory in early l991. A steadily declining
unemployment rate added to the overall optimism. These trends,
combined with sustained low interest rates, unleashed a flood of
demand for expensive credit purchases -- a practice nearly
abandoned by households in the past several years of uncertainty.
All of this evidence suggested that the economy had finally
turned the corner and would be able to produce moderate,
sustainable growth.
Staying the course The investment strategies adopted about 18
months ago continue to serve the fund well. As the economy
strengthened, we maintained our focus on the stocks of cyclical
companies we believed would benefit from low interest rates. We
also targeted those whose earnings were expected to rise because
of lower costs and increased sales, rather than because of price
inflation. In addition, we avoided traditional growth stocks such
as pharmaceuticals, tobacco, and foods, which were showing
disappointing results. Some of the areas we favored included:
Technology Hardware and software manufacturers, networking
companies, and cable television companies benefitted from
increased demand from consumers and businesses, from new product
announcements, and from the long-term prospects for developing
the information superhighway. It is no surprise to note that
companies such as Compaq Computer Corporation, Motorola, Inc.,
and Applied Materials, Inc. -- all portfolio holdings as of the
end of the period -- have outperformed the market.
Finance and banking We reduced some of the regional bank stocks
in the portfolio, in favor of the "asset gatherers," such as
Equitable Life Assurance Company, Dean Witter Discover, and
Travelers. Since interest rates remained low, many investors fled
the low-yielding products offered by banks, moving their assets
to other financial institutions offering a broader range of
investment options along with the potential to produce higher
returns.
Health care While the absence of health care stocks contributed
to the fund's strong performance in the recent past, during this
semiannual period we began looking for health care companies with
reasonable growth prospects and whose stocks are modestly priced.
In particular, we focused on companies that were downsizing and
getting their income statements in shape to compete, just as
industrial companies have done in the past few years.
Due in part to ongoing restructuring, many Health Maintenance
Organizations (HMOs) delivered very strong earnings, in many
cases, ahead of our projections. Earnings for U.S. Health Care,
for example, presented us with rewarding "earnings surprises" for
each of the last four quarters.
Automotive stocks During the final quarter of l993, domestic
automobile sales rose at an annual rate of 12.9 million -- the
highest growth rate in three years. Earnings for automobile
manufacturers and automobile parts companies continued the upward
trend that began more than a year ago and has frequently exceeded
market expectations. Chrysler Corporation is a good example; its
earnings have exceeded predicted figures each quarter for the
last five quarters.
Looking ahead In general, our outlook for U.S. equity markets
remains positive. This is based on three elements: earnings,
valuation, and liquidity.
Earnings -- Over the past several years, the focus on
cost-cutting by many companies has lead to broad industry
consolidations and restructurings, which in turn, have produced
higher productivity and stronger balance sheets. In addition,
there has been a renewed emphasis on product innovation and
selling into global markets. We believe that all of these
elements should contribute to excess cash flow, dividend
increases, and strong earnings gains for most U.S. firms.
Valuation -- We believe that the relatively high prices in the
equity markets should not be a serious threat to further advances
in these markets. Currently, price/earnings ratios, which are a
measure of how much investors pay for the earning power of a
stock, are only at average to above-average historic levels,
given the forecast of profit gain and low interest rates.
Liquidity -- Since we expect interest rates to remain relatively
low, we anticipate that investors will continue to flee
low-yielding investments in search of higher equity returns.
While this trend may not be as strong as it has been over the
past few years, we believe it will be sufficient enough to avoid
a stock market selloff.
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 January 31, 1994,
there is no guarantee the fund will continue to hold these
securities.
<PAGE>
Portfolio of
investments owned
January 31, 1994 (Unaudited)
Common Stocks (93.3%)(a)
Number of Shares Value
Technology (12.6%)
336,200 Analog Devices Inc.(b) $8,657,150
305,000 Applied Materials, Inc.(b) 13,458,125
160,000 Cisco Systems, Inc.(b) 11,600,000
145,000 Compaq Computer Corp.(b) 12,470,000
170,000 DSC Communications Corp.(b) 10,221,250
130,000 Intel Corp. 8,482,500
147,000 Motorola, Inc. 14,479,500
320,000 Oracle Systems Corp.(b) 10,280,000
205,000 Pitney Bowes, Inc. 9,199,375
465,000 Silicon Graphics, Inc.(b) 11,915,625
110,763,525
Insurance and Finance (12.5%)
100,000 American International Group, Inc. 9,262,500
303,600 Chase Manhattan Corp. 10,967,550
306,100 Chemical Banking Corp. 12,090,950
260,000 Dean Witter Discover & Co. 9,977,500
420,000 Equitable Cos., Inc. 12,495,000
102,400 First Interstate Bancorp 7,180,800
250,000 Fleet Financial Group, Inc. 8,781,250
210,000 Lincoln National Corp. 8,925,000
150,000 Transamerica Corporation 8,212,500
305,000 Travelers, Inc. 12,848,125
65,000 Wells Fargo & Co. 8,913,125
109,654,300
Health Care (10.5%)
140,300 Columbia Healthcare Corp. 5,313,862
217,700 Elan Corp., PLC ADR(b)(c) 9,796,500
225,000 Imcera Group Inc. 8,521,875
185,000 Johnson & Johnson 7,839,375
75,000 Medtronic, Inc. 6,300,000
415,000 Merck & Co., Inc. 15,147,500
290,000 Perrigo Co.(b) 8,845,000
115,000 Pfizer, Inc. 7,431,875
90,100 Stryker Corp. 3,153,500
150,000 U.S. Healthcare Inc. 9,975,000
115,000 United Healthcare Corp. 9,832,500
<PAGE>
Basic Industrial Products (9.1%)
145,000 Caterpillar, Inc. 15,098,125
385,000 Dresser Industries, Inc. 8,518,125
170,000 Eastman Kodak Co. 7,501,250
75,000 Hercules Inc. 8,212,500
135,000 Monsanto Co. 10,411,875
125,000 Raytheon Co. 8,468,750
285,000 Rockwell International Corp. 11,400,000
224,700 Trinity Industries, Inc. 9,858,713
79,469,338
Retail (8.9%)
251,900 American Greetings Corp. Class A 7,651,463
215,000 Lowes' Cos., Inc. 13,115,000
250,000 Penney (J.C.) Co. Inc. 13,093,750
280,000 Sears, Roebuck & Co. 15,365,000
270,450 Sensormatic Electronics Corp. 8,958,656
310,000 Sysco Corp. 8,447,500
419,600 TJX Cos., Inc. (The) 11,853,700
78,485,069
Consumer Services (8.9%)
260,000 Blockbuster Entertainment Corp. 7,182,500
36,500 GC Cos., Inc.(b) 1,341,375
255,000 International Game Technology 7,522,500
130,000 Premark International, Inc. 11,196,250
205,000 Procter & Gamble Co. 12,197,500
240,000 Promus Companies, Inc.(b) 12,150,000
170,000 QVC Network, Inc.(b) 7,480,000
275,000 Tele-Communications, Inc.
Class A(b) 7,493,750
120,000 Viacom, Inc. Class B(b) 4,170,000
420,000 Wendy's International, Inc. 7,192,500
77,926,375
Oil and Gas (7.6%)
175,000 Anadarko Petroleum Corp. 8,312,500
170,000 Chevron Corp. 15,873,750
235,000 MCN Corp. 8,665,625
195,000 Mobil Corp. 15,795,000
330,000 Sonat, Inc. 10,271,250
279,200 Williams Cos., Inc. 7,294,100
66,212,225
Automotive (7.1%)
235,000 Chrysler Corp. 14,452,500
192,000 Dana Corp. 11,208,000
282,700 Echlin, Inc. 9,823,825
265,000 General Motors Corp. 16,264,375
205,000 Magna International, Inc. Class A 10,275,625
62,024,325
Conglomerates (3.8%)
215,000 General Electric Co. 23,166,250
100,000 ITT Corp. 9,837,500
33,003,750<PAGE>
Consumer: Durable Goods (3.0%)
234,500 Leggett & Platt, Inc. 10,904,250
70,100 Shaw Industries Inc. 1,428,288
200,000 Whirlpool Corp. 13,525,000
25,857,538
Business Services (2.8%)
310,000 General Motors Corp. Class E 9,300,000
365,000 Harcourt General, Inc. 13,140,000
43,400 Paychex, Inc. 1,736,000
24,176,000
Communications (2.7%)
410,000 MCI Communications Corp. 11,326,250
350,000 Sprint Corp. 12,687,500
24,013,750
Transportation (2.4%)
155,000 Burlington Northern Inc. 10,016,875
145,000 Federal Express Corp.(b) 11,020,000
Food and Beverages (1.4%)
74,600 Campbell Soup Co. 2,890,750
225,700 Coca-Cola Company 9,225,488
12,116,238
Total Common Stocks
(cost $672,082,365) $816,896,295
Short-Term Investments (7.2%)(a)
Principal Amount Value
$10,000,000 General Electric Capital Corp., 3.02s,
February 7, 1994 $9,994,967
10,000,000 Lehman Brothers Holdings Inc. 3.05s,
February 4, 1994 9,997,458
12,600,000 Preferred Receivables Funding Corp. 3.04s,
February 10, 1994 12,590,424
30,531,000 Interest in $414,661,000 joint
repurchase agreement dated January 31,
1994 with Kidder Peabody & Co., Inc.
with respect to various U.S. Treasury
obligations -- maturity value
of $30,533,688 for an effective yield of
3.17% 30,531,000
Total Short-Term Investments
(cost $63,113,849) $63,113,849
Total Investments
(cost $735,196,214)(d) $880,010,144
<PAGE>
(a) Percentages indicated are based on total net assets of
$875,905,178, which correspond to a net asset value per class A
share and class B share of $8.43 and $8.38, respectively.
(b) Non-income-producing security.
(c) Security whose value is determined or significantly
influenced by trading or exchanges not in the United States or
Canada. 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.
(d) The aggregate identified cost on a tax basis is $735,196,214,
resulting in gross unrealized appreciation and depreciation of
$154,619,078 and $9,805,148, respectively, or net unrealized
appreciation of $144,813,930.
<PAGE>
<TABLE>
<CAPTIONS>
Statement of
assets and liabilities
January 31, 1994 (Unaudited)
<S> <C> <C>
Assets
Investments in securities, at value (identified cost
$735,196,214) (Note 1) $880,010,144
Cash 1,293
Dividends and other receivables 486,060
Receivable for securities sold 7,345,171
Receivable for shares of the Fund sold 1,320,308
Total assets 889,162,976
Liabilities
Payable for securities purchased $9,983,945
Payable for shares of the Fund repurchased 1,081,147
Payable for compensation of Manager (Note 2) 1,286,032
Payable for administrative services (Note 2) 1,567
Payable for investor servicing and custodian
fees (Note 2) 133,559
Payable for distribution fees (Note 2) 188,443
Other accrued expenses 583,105
Total liabilities 13,257,798
Net assets $875,905,178
Represented by
Paid-in capital (Notes 1 and 4) $684,862,871
Distributions in excess of net investment income (Note 1) (591,644)
Accumulated net realized gain on investments 46,820,021
Net unrealized appreciation of investments 144,813,930
<PAGE>
Total -- Representing net assets applicable to capital
shares outstanding $875,905,178
Computation of net asset value and offering price
Net asset value and redemption price of class A shares
($861,787,858 divided by 102,221,090 shares) $8.43
-----
Offering price per share (100/94.25 of $8.43)* $8.94
-----
Net asset value and offering price of class B shares
($14,117,321 divided by 1,684,106 shares)** $8.38
*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.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
Six months ended January 31, 1994 (Unaudited)
<S> <C> <C>
Investment income:
Dividends (net of foreign tax of $9,722) $7,106,795
Interest 686,044
Total investment income 7,792,839
Expenses:
Compensation of Manager (Note 2) $2,577,581
Investor servicing and custodian fees (Note 2) 289,735
Compensation of Trustees (Note 2) 12,472
Auditing 8,606
Legal 7,450
Administrative services (Note 2) 8,355
Distribution fees -- class A (Note 2) 1,038,986
Distribution fees -- class B (Note 2) 39,189
Total expenses 3,982,374
Net investment income 3,810,465
Net realized gain on investments (Notes 1 and 3) 70,341,282
Net unrealized appreciation of investments during the period12,271,925
Net gain on investments 82,613,207
Net increase in net assets resulting from operations $86,423,672
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
changes in net assets
Six months
ended Year ended
January 31 July 31
------------ ------------
1994* 1993
<S> <C> <C>
Increase in net assets
Operations:
Net investment income $3,810,465 $6,357,040
Net realized gain on investments 70,341,282 111,724,397
Net unrealized appreciation of investments 12,271,925 14,756,155
Net increase in net assets resulting from
operations 86,423,672 132,837,592
Undistributed net investment income included
in price of shares sold and repurchased, net -- (167)
Distributions to shareholders:
From net investment income
Class A (4,369,637) (3,780,141)
Class B (32,471) --
In excess of net investment income
Class A -- (2,557,261)
Class B -- (10,014)
From net realized gain on investments
Class A (112,980,630) (93,694,625)
Class B (984,230) --
Increase from capital share transactions
(Note 4) 98,327,992 62,246,144
Total increase in net assets 66,384,695 95,041,528
Net assets
Beginning of period 809,520,484 714,478,956
End of period (including (distributions in
excess of) and undistributed net investment
income of $(591,644) and $2,366,933,
respectively) $875,905,178 $809,520,484
*Unaudited.
/TABLE
<PAGE>
<TABLE>
<CAPTIONS>
Financial
Highlights*
(For a share outstanding throughout the period)
Six March 1, 1993 Six Seven
Months (commencementmonths months
ended of operations) to ended ended
January 31 July 31 January 31 Year ended July 31 July 31
Class B Class A
1994** 1993 1994** 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begining of Period $8.85 $8.32 $8.87 $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90$9.84
Investment Operations
Net Investment Income (Loss) .02 (.03) .02 .08 .12 .15 .22 .17 .13 .15 .23 .25
Net Realized and Unrealized Gain on
Investments .82 .61 .88 1.45 .21 .89 .63 1.71 .36 .57 1.46 2.52
Total from Investment Operations .84 .58 .90 1.53 .33 1.04 .85 1.88 .49 .72 1.69 2.77
Distributions to Shareholders
From Net Investment Income (.02) -- (.05) (.04) (.15) (.17) (.29) (.08) (.15) (.27) (.20) (.20)
In Excess of Net Investment Income -- (.05) -- (.03) -- -- -- -- -- -- -- --
From Net Realized Gain on Investments (1.29) --(1.29) (1.16) (.81) (.42) (.54) -- -- (5.48) (1.77)(.51)
Total Distributions (1.31) (.05) (1.34)(1.23) (.96) (.59) (.83) (.08) (.15)(5.75) (1.97) (.71)
Net Asset Value, End of Period $8.38 $8.85 $8.43 $8.87 $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90
Total Investment Return at Net Asset
Value (%)(a) 20.54(b) 16.57(b) 21.92(b) 19.24 4.49 13.32 10.3147.02(b) 7.48 4.00 15.7429.20
Net Assets, End of Period
(in thousands) $14.117 $4,789 $861,788 $804,731 $714,479$739,775 $704,189$699,176 $609,631Rat
Net Assets (%) 1.69(b) 1.74(b) .93(b) .90 .94 .89 .81 .79(b) .68 .61 .49 .51
Ratio of Net Investment Income (Loss)
to Average Net Assets (%) .12(b) (.29)(b) .91(b) .84 1.33 1.78 2.423.67(b) 1.84 1.48 2.00 2.33
Portfolio Turnover (%) 51.81(c) 134.14(c) 51.81(c) 134.14 100.26 58.30 51.4731.96(c) 82.20 83.57 119.5979.25
<PAGE>
*Financial Highlights for periods ended through July 31, 1992 have been restated to conform with requirements issued by
the SEC in A
equalization accounting (see Note 1 of Notes to financial statements).
**Unaudited.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Annualized.
(c) Not annualized.
/TABLE
<PAGE>
Notes to
financial statements
January 31, 1994 (Unaudited)
Note 1 Significant accounting policies
The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment
company. The Fund seeks 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 holders 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 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.
<PAGE>
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.
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.
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.
Prior to July 10, 1992, such fee was based on the following
annual rates: 0.7% of the first $100 million of average net
assets, 0.6% of the next $100 million, 0.5% of the next $300
million, 0.45% of the next $500 million, and 0.425% of any amount
over $1.0 billion, subject to the same reductions.
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 six months ended January 31, 1994, the Fund
paid $8,355 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,520
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.
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 six months
ended January 31, 1994 amounted to $289,735. Investor servicing
and custodian fees reported in the Statement of operations for
the six months ended January 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 Funds 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 six months ended
January 31, 1994, the Fund paid $1,038,986 in distribution fees
for class A shares.
During the six months ended January 31, 1994, Putnam Mutual Funds
Corp., acting as an underwriter, received net commissions of
$56,874 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 purchased as part of an investment
of $1 million or more. For the six months ended January 31, 1994,
Putnam Mutual Funds Corp., acting as an underwriter, received
$143 on such redemptions.
The Fund has adopted a distribution plan with respect to 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 up to 1.00% of the Fund's
average net assets attributable to class B shares. For the six
months ended January 31, 1994, the Fund paid Putnam Mutual Funds
Corp., distribution fees of $39,189 for class B shares.
Putnam Mutual Funds Corp. also receives the proceeds on the
contingent deferred sales charges on its class B share
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 six months ended January 31, 1994,
Putnam Mutual Funds Corp., acting as an underwriter, received
$2,253 in contingent deferred sales charges from redemptions .
Note 3 Purchases and sales of securities
During the six months ended January 31, 1994, purchases and sales
of investment securities other than short-term investments
aggregated $407,190,152 and $408,849,002, respectively. In
determining the net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
<PAGE>
<TABLE>
<CAPTION>
Note 4 Capital shares
At January 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:
Six months ended
January 31 Year ended July 31
1994 1993
Class A Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 8,882,408 $77,141,752 18,086,945 $154,013,159
Shares issued in
connection with
reinvestment of
distributions 12,360,664 98,638,098 10,130,304 82,418,276
21,243,072 175,779,850 28,217,249 236,431,435
Shares repurchased (9,712,260) (87,077,479) (20,888,070) (178,897,154)
Portion represented
by undistributed
net investment
income -- -- -- 403
Net increase 11,530,812 $88,702,371 7,329,179 $57,534,684
March 1, 1993
(commencement of
Six months ended operations) to
January 31, 1994* July 31, 1993
Class B Shares Amount Shares Amount
Shares sold 2,103,494 $18,535,213 672,847 $5,864,961
Shares issued in
connection with
reinvestment of
distributions 117,975 939,076 1,143 9,724
2,221,469 19,474,289 673,990 5,874,685
Shares repurchased (1,078,549) (9,848,668) (132,804) (1,162,990)
Portion represented
by undistributed
net investment
income -- -- -- (235)
Net increase 1,142,920 $9,625,621 541,186 $4,711,460
/TABLE
<PAGE>
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 Investment
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 $4,934,375 to
increase undistributed net investment income and $14,327,974 to
increase accumulated net realized gain with a net decrease of
$19,262,349 to paid-in capital. These adjustments represent the
cumulative amounts necessary to report these balances on a tax
basis as of August 1, 1993. These reclassifications, which have
no impact on the total net asset value of the Fund, are primarily
attributable to tax equalization which is treated differently in
the computation of distributable income and capital gains under
federal income tax rules and regulations versus generally
accepted accounting principles.
Fund performance supplement
Putnam Investors Fund is managed for long-term growth of capital
through investments in quality common stocks. Standard & Poor's
500 Index is an unmanaged list of large-capitalization common
stocks; it assumes reinvestment of all distributions. The index
does not take into account brokerage commissions or other costs.
The fund's portfolio contains securities that do not match those
in the index. The Consumer Price Index is a commonly used measure
of inflation; it does not represent an investment return.
Fund performance data do not take into account any adjustment
made for taxes payable on reinvested distributions.
The fund performance supplement has been prepared by Putnam
Management to provide additional information about the fund and
the indexes used for performance comparisons. The information is
not part of the portfolio of investments owned or the financial
statements.
<PAGE>
Your Trustees
George Putnam
Chairman
Chairman and President,
The Putnam Funds
William F. Pounds
Vice Chairman
The Putnam Funds,
Professor of Management,
Alfred P. Sloan
School of Management,
Massachusetts Institute of
Technology
Jameson Adkins Baxter
President,
Baxter Associates, Inc.
Hans H. Estin
Vice Chairman,
North American
Management Corporation
John A. Hill
Principal and
Managing Director,
First Reserve Corp.
Elizabeth T. Kennan
President
Mount Holyoke College
Lawrence J. Lasser
President and
Chief Executive Officer,
Putnam Investments, Inc.
Robert E. Patterson
Executive Vice President,
Cabot Partners
Limited Partnership
Donald S. Perkins
Director of various
corporations
George Putnam, III
President, New Generation
Research, Inc.
A.J.C. Smith
Chairman of the Board
and Chief Executive Officer,
Marsh & McLennan
Companies, Inc.
W. Nicholas Thorndike
Director of various
corporations
<PAGE>
Putnam
Investors
Fund
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
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
(DALBAR logo)
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception. In more than
10,000 tests of 38 shareholder
service components, Putnam
outperformed the
industry standard
in every category.
11142 3/94
<PAGE>
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
John R. Verani
Vice President
Peter Carman
Vice President
John J. Morgan, Jr.
Vice President
Brooke Cobb
Vice President and Fund Manager
William N. Shiebler
Vice President
John D. Hughes
Vice President and Treasurer
Paul O'Neil
Vice President
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.
<PAGE>
- ---------------
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
- ---------------
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) Headers (e.g, the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
