[GRAPHIC OMITTED: ARTWORK]
Putnam
Investors
Fund
SEMIANNUAL REPORT
January 31, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* For the past 10 years, Putnam Investors Fund's class A
shares have consistently outperformed more than 60% of the funds in
Lipper Analytical Services' growth fund category. Specifically, for the
one- and three-year periods ended January 31, 1996, the fund's class A
shares outperformed 86% and 82% of the growth funds in Lipper's
category, respectively.*
* "Putnam Investors Fund's solid performance over the
years is a direct result of a trifold investment philosophy, which every
member of Putnam's Core Growth Equity management team endorses. It
involves traditional fundamental analysis combined with systematic stock
selection, active risk management, and a strict sell discipline. As one
of the newer members of Putnam's team, I look forward to carrying on
this fund's tradition of pursuing attractive returns without taking
undue risk."
-- C. Beth Cotner, Senior Vice President,
Senior Portfolio Manager
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
13 Portfolio holdings
17 Financial statements
*Lipper Analytical Services, an independent research organization, ranks
funds according to total return performance; rankings vary over time and
do not reflect the effects of sales charges. The fund's class A shares
ranked 79 out of 580 growth funds for 1-year performance, 61 out of 350
for 3 years, 81 out of 238 for 5 years, and 52 out of 154 for 10 years
as of January 31, 1996. Class B shares ranked 94 out of 580 for the 1-
year period ended January 31, 1996. Other share classes will vary. Past
performance is not indicative of future results.
[GRAPHIC OMITTED: photo of George Putnam]
(copyright) Karsh, Ottawa
From the Chairman
Dear Shareholder:
The first half of Putnam Investors Fund's current fiscal year fell
squarely within one of the most exuberant stock market environments in
recent memory. The extent of the rise in equities, along with
management's adept positioning within that market, is clearly reflected
in your fund's performance during the six months ended January 31, 1996.
Quite naturally, we are pleased with the results. However, as recent
events have demonstrated, favorable conditions like these do not last
indefinitely. It would be a realistic expectation to see some moderation
in the pace of the advance and further corrections from time to time
during the second half of fiscal 1996. Putnam Management believes the
prospect of a slower economy still has the potential to cool equity
investors' ardor a bit.
As a result, the market may be in for some additional near-term
volatility. Nevertheless, your fund's management team, now headed by
C. Beth Cotner, believes that stocks, on balance, will continue their
upward course in 1996, though at a more subdued pace than they enjoyed
in 1995. Beth came to Putnam in 1995 from Kemper Financial Services. She
has 19 years of investment experience.
Respectfully yours,
/s/George Putnam
Chairman of the Trustees
March 20, 1996
Report from the Fund Managers
C. Beth Cotner, lead manager
Carol C. McMullen
David J. Santos
The investment environment characterizing the first six months of Putnam
Investors Fund's 1996 fiscal year has proved no less spectacular than
the one during the preceding six months. Between August 1, 1995, and
January 31, 1996, the U.S. stock market again achieved record levels.
Through it all, your fund continued to ride the market's rally. As of
January 31, 1996, the fund produced total returns of 12.17% for class A
shares, 11.76% for class B shares, and 11.93% for class M shares at net
asset value; shares rose 5.74%, 6.85%, and 7.98% at public offering
price, respectively. Results for longer periods can be found in the
performance section immediately following this report.
*MARKET CONDITIONS AND LARGE-CAP FOCUS PROVE FAVORABLE
FOR FUND HOLDINGS
The past six months were indeed exceptional for the broad stock market.
A concentration in relatively conservative large-company growth stocks -
- - those with market capitalizations greater than $5 billion whose
earnings are growing and appear sustainable -- made your fund
particularly well suited to benefit from the shifting investor focus.
As the economy slowed this past summer, investors began to rotate away
from cyclicals -- companies whose profits are heavily influenced by
changes in the economy -- and focused instead on smaller companies
capable of producing dynamic earnings surprises. While maintaining a
heavy exposure to large-company growth stocks, we slightly increased the
fund's weighting in midsize companies, those with $1 billion to $5
billion market capitalizations.
By period's end, investors had migrated back toward higher-quality
larger-cap firms. Anticipating a slowing economy, investors gravitate
toward stocks with highly predictable earnings. Consequently, many of
your fund's large-company holdings, particularly those that exhibit the
potential for proven and consistent earnings growth, have gained favor.
Many of these were concentrated in a few key industries, such as
pharmaceuticals, multinationals, consumer nondurables, and regional Bell
operating companies.
For example, Bell Atlantic Corporation has recently benefited from
increased global demand for telecommunications products and services.
(While this stock, along with others discussed in this report, was
viewed favorably at the end of the fiscal period, all portfolio
holdings are subject to review and adjustment in accordance with the
fund's investment strategy and may well vary in future.) Globally
diverse consumer nondurables, such as Procter & Gamble, the world's
leading household-products company, and Nike, the world's largest shoe
company, are benefiting from revitalized product lines and increased
demand at home and abroad.
*THREE TOP-PERFORMING INDUSTRY SECTORS DOMINATED
PORTFOLIO
We construct your fund's portfolio on a stock-by-stock basis, using
screening techniques and fundamental analysis to find companies with
identifiable growth opportunities, expanding profit margins, and strong
cash flows. However, this bottom-up investment approach does not inhibit
our ability to capitalize on attractive industry themes. Throughout the
period, we have succeeded in tapping the growth potential of three top-
performing industry sectors: technology, health care, and insurance and
finance.
Technology Technology-related stocks continued to be a highlight of your
fund's portfolio despite bouts of volatility. The growing popularity of
the Internet, the recently approved deregulation in the cable and
telecommunications sectors, and the introduction of new products drove
many of your fund's holdings upward in price. Within the technology
group, we repositioned holdings modestly to favor smaller software-
intensive or networking-oriented stocks over larger systems companies.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS*]
showing:
Insurance and finance 15.2%
Pharmaceuticals 9.8%
Energy related 8.1%
Retail 5.9%
Consumer nondurables 5.4%
Footnote reads:
*Based on net assets as of 1/31/96. Holdings and top industry sectors
will vary over time.
Companies like Cisco Systems, a manufacturer of computer networking
systems, and Hewlett Packard, a force in office and personal computing
and a leader in medical information technology, have performed well
throughout the past six months, while newer additions such as Linear
Technology, an integrated circuit manufacturer, and Parametric
Technology, a leader in mechanical-design automation, have also added to
the fund's performance.
Health care Your fund benefited enormously from an ample exposure to
health-care stocks. Investors focused on the historic stability of
earnings gains in the face of drug unit volume growth, a rejuvenated FDA
approval cycle, and new-product development. We increased the fund's
existing position in Amgen, Inc., one of the world's largest
biotechnology firms, and purchased stocks in companies such as
Medtronic, Inc., the world's leading producer of heart pacemakers,
Baxter International, Inc., the world's largest manufacturer of
disposable medical supplies, and Eli Lilly & Co., a global
pharmaceutical giant.
Insurance and finance We maintained a significant focus on interest-
rate-sensitive financial and insurance stocks, which provided a
substantial boost to fund performance. Many of the fund's large
financial and bank stocks, BankAmerica and Citicorp, for example, showed
meaningful appreciation, energized by falling interest rates. More
recently, certain types of specialty finance companies, such as
transaction-oriented companies and credit card operators, have gained a
place in the fund's portfolio. MGIC, parent company of Mortgage Guaranty
Insurance Co., a leading provider of mortgage insurance to lenders, is
one such addition, as is MBNA, one of the largest issuers of MasterCard
and Visa credit cards in the U.S. Both companies are experiencing rapid
earnings growth.
[GRAPHIC OMITTED: TOP 10 HOLDINGS (1/31/96)]
showing:
KIMBERLY-CLARK CORPORATION
Consumer nondurables
SBC COMMUNICATIONS
Regional telephone services
PHILIP MORRIS COMPANIES, INC.
Leading tobacco, food processing, and brewing company
BOEING CO.
Global aerospace leader
PHARMACIA & UPJOHN INC.
Diverse pharmaceuticals
JOHNSON & JOHNSON
World's largest, most comprehensive health-care company
MICROSOFT CORPORATION
World's largest independent software company
MOBILE CORP.
Worldwide petroleum and chemicals company
PEPSICO INC.
Beverage and snack food producer; restaurant franchiser
CITICORP
Banking, financial services
Footnote reads: These holdings represent 17.7% of the fund's assets.
Portfolio holdings will vary over time.
*INDIVIDUAL STOCK SELECTION BECOMING MORE IMPORTANT
We enter the second half of fiscal 1996 with a U.S. economy that
displays mixed signals: slow growth, budget discord, and consumer
uncertainty contrasted with low interest rates, high productivity, and
strong financial markets. While we believe that some degree of
volatility may be expected in light of the market's recent strength.
It seems, at least for the near term, that we have witnessed the peak in
corporate profit growth. Consequently, the search for positive earnings
surprises will be more difficult to achieve.
Going forward, we recommend that you keep this longer-term outlook in
mind even if short-term nervousness arises. Indeed, "today we have a
political environment in which major policy changes are going to take
place that make the long-term economic and investment outlook in this
country brighter than it's been since the early 1980s," contends
Putnam's Senior Economic Advisor, Robert Goodman, Ph.D. Such
developments may well support the market over time.
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 1/31/96, there is no guarantee the fund will
continue to hold these securities in the future.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam Investors Fund is designed for investors seeking long-
term growth through quality common stocks, as well as any increased
income resulting from this growth.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 1/31/96
Class A Class B Class M
Inception date (12/1/25) (3/1/93) (12/2/94)
NAV POP NAV CDSC NAV POP
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 months 12.17% 5.75% 11.76% 6.85% 11.93% 7.98%
- -----------------------------------------------------------------------------------------
1 year 40.60 32.53 39.58 34.58 40.03 35.15
- -----------------------------------------------------------------------------------------
5 years 111.12 99.07 -- -- -- --
Annual average 16.12 14.76 -- -- -- --
- -----------------------------------------------------------------------------------------
10 years 273.15 251.63 -- -- -- --
Annual average 14.07 13.40 -- -- -- --
- -----------------------------------------------------------------------------------------
Life of class -- -- 54.75 51.75 43.59 38.60
Annual average -- -- 16.13 15.35 36.24 32.18
- -----------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/96
Standard & Poor's Consumer
500 Index Price Index
- ----------------------------------------------------------------------
6 months 14.49% 1.25%
- ----------------------------------------------------------------------
1 year 38.56 2.73
- ----------------------------------------------------------------------
5 years 113.15 14.71
Annual average 16.34 2.78
- ----------------------------------------------------------------------
10 years 310.40 40.83
Annual average 15.16 3.49
- ----------------------------------------------------------------------
Life of class B 55.55 7.90
Annual average 16.34 2.64
- ----------------------------------------------------------------------
Life of class M 44.72 3.14
Annual average 37.15 2.00
- ----------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions or,
for class A shares, distribution fees prior to implementation of the
class A distribution plan in 1990. Investment returns and principal
value will fluctuate so that an investor's shares, when sold, may be
worth more or less than their original cost.
POP assumes 5.75% maximum sales charge for class A shares and 3.50% for
class M shares. CDSC for class B shares assumes the applicable sales
charge, with the maximum being 5%.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 12/31/95
(most recent current calendar quarter)
Class A Class B Class M
NAV POP NAV CDSC NAV POP
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 months 13.67% 7.10% 13.40% 8.42% 13.42% 9.48%
- ------------------------------------------------------------------------------------------
1 year 37.55 29.56 36.60 31.60 36.93 32.12
- -----------------------------------------------------------------------------------------
5 years 117.70 105.26 -- -- -- --
Annual average 16.83 15.47 -- -- -- --
- ------------------------------------------------------------------------------------------
10 years 266.76 245.56 -- -- -- --
Annual average 13.88 13.20 -- -- -- --
- ------------------------------------------------------------------------------------------
Life of class -- -- 49.96 46.96 39.05 34.22
Annual average -- -- 15.34 14.52 35.70 31.33
- ------------------------------------------------------------------------------------------
</TABLE>
PRICE AND DISTRIBUTION INFORMATION
6 months ended 1/31/96
Class A Class B Class M
- -----------------------------------------------------------------------
Distributions (number) 1 1 1
- -----------------------------------------------------------------------
Income $0.085 $0.041 $0.071
- -----------------------------------------------------------------------
Capital gains
- -----------------------------------------------------------------------
Long-term 1.05 1.05 1.05
- -----------------------------------------------------------------------
Short-term 0.073 0.073 0.073
- -----------------------------------------------------------------------
Total 1.123 1.123 1.123
- -----------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- -----------------------------------------------------------------------
7/31/95 $9.05 $9.60 $8.88 $9.02 $9.35
- ------------------------------------------------------------------------
1/31/96 8.90 9.44 8.72 8.86 9.18
- ------------------------------------------------------------------------
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 5.75% sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B shares and assumes redemption at the end of
the period. Your fund's CDSC declines from a 5% maximum during the first
year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies.
COMPARATIVE BENCHMARKS
Standard & Poor's 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. It is not
possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
A Putnam perspective on risk and reward
You've probably been told how important it is to understand the
relationship between an investment's potential rewards and its
accompanying risks. Given the cautionary nature of such
instructions, it may take most investors a while to realize that risk
has a positive side.
Every risk signals a potential reward. Selecting only those investments
that offer the greatest degree of security generally leads to only
modest rewards. Furthermore, even insured or guaranteed investments may
be subject to changes in their rates of return or, in some cases, in
their principal values. Experienced investors know that no investment is
truly risk free and are therefore willing to take on some measure of
risk in order to increase their potential gains.
The greater the risk, the greater the potential reward. Accepting an
appropriate level of investment risk can give you a better chance of
outpacing inflation over time and seeking to maximize your investment's
return. How much risk? Your financial advisor's feedback and your time
horizon can make all the difference in determining how much risk is
compatible with your investment goals and your peace of mind.
* FITTING YOUR FUND SELECTION TO YOUR
RISK TOLERANCE
How do you find the right balance between investment risks and their
potential rewards? It's helpful to understand the types of risks that
can apply to different types of investments, and to look at your own
portfolio with this perspective.
For short-time goals, your first priority may be managing market risk.
Longer-term investors may be more concerned with inflation risk. And all
income-oriented investors should consider interest-rate, credit, and
prepayment risks carefully. Within each of Putnam's four investment
categories, you can select funds with differing levels of risk and
reward potential to customize your portfolio.
This list covers only the most general types of risks; however, each
investment will also have its own specific risks. You will find a more
detailed discussion of these risk consideration in each fund's
prospectus.
* A RUNDOWN OF RISK TYPES
MARKET RISK Most important for stock funds, but relevant to all funds,
this is a measure of how sensitive a fund's holdings are to changes in
general market conditions. Remember, though, that securities that lose
value quickly in market declines may also show the strongest gains in
more favorable environments.
INTEREST-RATE RISK Since bond prices fall as interest rates rise, this
type of risk is a particular concern for fixed-income inves-
tors. However, interest-rate increases can also have a substantial
negative effect on the stock market.
INFLATION RISK If your investments cannot keep pace with inflation, your
money will begin to lose its purchasing power. Stock investments are
generally considered among the best ways of addressing inflation risk
over the long term.
CREDIT AND PREPAYMENT RISK Credit risk is the concern that the
security's issuer will not be able to meet its payment, while prepayment
risk involves the premature payoff of a loan, with a resulting loss of
interest income. Professional management and in-depth research are
invaluable in managing both these risks.
LIQUIDITY RISK Not all investments can be readily converted into cash at
their perceived market values. Liquidity risk can affect the price of
securities held in the fund's portfolio and, thus, the fund's share
prices.
<TABLE>
<CAPTION>
Portfolio of investments owned
January 31, 1996 (Unaudited)
COMMON STOCKS (94.3%)*
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Aerospace and Defense (3.7%)
- ------------------------------------------------------------------------------------------------
277,000 Boeing Co. $ 21,502,125
161,800 Lockheed Martin Corp. 12,195,675
112,100 Textron, Inc. 8,813,863
------------------
42,511,663
Automotive (1.2%)
- ------------------------------------------------------------------------------------------------
239,800 General Motors Corp. Class H 13,668,600
Basic Industrial Products (0.8%)
- ------------------------------------------------------------------------------------------------
134,000 Sundstrand Corp. 9,246,000
Broadcasting (1.7%)
- ------------------------------------------------------------------------------------------------
86,300 Capital Cities/ABC, Inc. 11,100,338
295,600 Tele-Comm Liberty Media Group, Inc. Class A + 8,092,050
------------------
19,192,388
Business Equipment and Services (4.3%)
- ------------------------------------------------------------------------------------------------
9,400 Alco Standard Corp. 368,950
207,000 First Data Corp. 14,645,250
280,400 General Motors Corp. Class E 15,562,200
110,400 HBO & Co. 9,273,600
78,800 Xerox Corp. 9,741,650
------------------
49,591,650
Chemicals (2.2%)
- ------------------------------------------------------------------------------------------------
148,900 Air Products & Chemicals, Inc. 7,947,538
115,000 Great Lakes Chemical Corp. 8,581,875
248,600 Praxair, Inc. 8,452,400
------------------
24,981,813
Computer Services and Software (5.3%)
- ------------------------------------------------------------------------------------------------
153,800 Computer Associates Intl., Inc. 10,516,075
134,100 IBM Corp. 14,583,375
119,800 Informix Corp. + 3,998,325
213,700 Microsoft Corp. + 19,767,250
179,500 Parametric Technology Corp. + 11,622,625
------------------
60,487,650
Consumer Durable Goods (0.9%)
- ------------------------------------------------------------------------------------------------
302,900 Black & Decker Manufacturing Co. 10,260,738
Consumer Non Durables (5.4%)
- ------------------------------------------------------------------------------------------------
279,396 Kimberly-Clark Corp. 22,526,303
237,900 Philip Morris Cos., Inc. 22,124,700
208,200 Procter & Gamble Co. 17,462,775
------------------
62,113,778
Consumer Services and Lodging (2.6%)
- ------------------------------------------------------------------------------------------------
258,350 CUC International, Inc. + 9,526,656
207,300 Marriott International, Inc. 8,887,988
293,800 Mirage Resorts, Inc. + 11,458,200
------------------
29,872,844
Electronics and Electrical Equipment (4.1%)
- ------------------------------------------------------------------------------------------------
135,100 Emerson Electric Co. 11,314,625
206,100 Hewlett-Packard Co. 17,466,975
345,500 Honeywell, Inc. 17,577,313
------------------
46,358,913
Energy-Related (8.1%)
- ------------------------------------------------------------------------------------------------
138,200 British Petroleum Co. PLC ADR(United Kingdom) 13,491,775
245,400 Enron Corp. 9,079,800
195,900 Exxon Corp. 15,720,975
180,200 Fluor Corp. 12,073,400
232,600 Halliburton Co. 12,007,975
172,000 Mobil Corp. 19,049,000
337,200 Total Corp. ADR (France) 11,633,400
------------------
93,056,325
Entertainment (0.9%)
- ------------------------------------------------------------------------------------------------
268,400 Viacom, Inc. Class B + 10,870,200
Food and Beverages (3.6%)
- ------------------------------------------------------------------------------------------------
161,200 Anheuser-Busch Cos., Inc. 11,203,400
290,400 Nabisco Holdings Corp. Class A 10,091,400
305,100 PepsiCo, Inc. 18,191,588
25,900 Pioneer Hi-Bred International, Inc. 1,320,900
------------------
40,807,288
Health Care (3.9%)
- ------------------------------------------------------------------------------------------------
252,000 Baxter International, Inc. 11,466,000
199,100 Columbia/HCA Healthcare Corp. 11,074,938
185,900 Guidant Corp. 8,528,163
85,200 Medtronic, Inc. 4,867,050
138,500 United Healthcare Corp. 8,708,188
------------------
44,644,339
Insurance and Finance (15.2%)
- ------------------------------------------------------------------------------------------------
106,000 AON Corp. 5,763,750
141,300 American International Group, Inc. 13,688,438
243,400 Bank of Boston Corp. 11,135,550
251,500 BankAmerica Corp. 16,944,813
88,500 CIGNA Corp. 10,498,313
184,500 Chemical Banking Corp. 12,361,500
239,300 Citicorp 17,678,288
479,600 Federal National Mortgage Association 16,546,200
155,500 Franklin Resources, Inc. 8,338,688
253,600 MBNA Corp. 10,334,200
138,000 MGIC Investment Corp. 8,901,000
186,100 Merrill Lynch & Co., Inc. 10,584,438
199,900 NationsBank Corp. 13,968,013
265,500 Travelers Group Inc. 17,456,625
------------------
174,199,816
Metals and Mining (0.7%)
- ------------------------------------------------------------------------------------------------
287,400 Freeport-McMoRan Copper & Gold Co., Inc. Class A 8,334,600
Networking (2.4%)
- ------------------------------------------------------------------------------------------------
198,200 3Com Corp. + 9,092,425
111,700 Cabletron Systems, Inc. + 8,614,863
118,800 Cisco Systems, Inc. + 9,890,100
------------------
27,597,388
Pharmaceuticals (9.8%)
- ------------------------------------------------------------------------------------------------
186,800 Amgen, Inc. + 11,231,350
208,400 Johnson & Johnson 20,006,400
261,500 Lilly (Eli) & Co. 15,036,250
217,700 Merck & Co., Inc. 15,293,425
196,200 Pfizer, Inc. 13,488,750
478,250 Pharmacia & Upjohn, Inc. 20,026,719
300,400 Smithkline Beecham PLC ADR (United Kingdom) 16,897,500
------------------
111,980,394
Photography (1.8%)
- ------------------------------------------------------------------------------------------------
156,700 Eastman Kodak Co. 11,497,863
198,000 Polaroid Corp. 8,885,250
------------------
20,383,113
Publishing (0.2%)
- ------------------------------------------------------------------------------------------------
50,500 Harcourt General, Inc. 1,969,500
Retail (5.9%)
- ------------------------------------------------------------------------------------------------
332,000 Federated Department Stores + 8,964,000
188,000 Nike, Inc. 13,113,000
384,700 Officemax, Inc. + 8,848,100
94,000 Rite Aid Corp. 3,019,750
365,400 Safeway, Inc. + 9,317,700
329,000 Sears, Roebuck & Co. 13,653,500
259,400 Staples, Inc. + 6,387,725
105,400 Walgreen Co. 3,675,825
------------------
66,979,600
Semiconductors (1.6%)
- ------------------------------------------------------------------------------------------------
258,400 Applied Materials, Inc. + 9,560,800
195,700 Linear Technology Corp. 8,635,263
------------------
18,196,063
Telecommunications (1.9%)
- ------------------------------------------------------------------------------------------------
591,900 MCI Communications Corp. 16,943,126
50,400 U.S. Robotics Corp. + 4,447,800
------------------
21,390,926
Transportation (1.2%)
- ------------------------------------------------------------------------------------------------
167,700 Burlington Northern Santa Fe Corp. 13,730,438
Utilities (4.9%)
- ------------------------------------------------------------------------------------------------
242,600 Bell Atlantic Corp. 16,709,075
381,800 GTE Corp. 17,562,800
394,100 SBC Communications, Inc. 22,315,913
------------------
56,587,788
------------------
Total Common Stocks (cost $850,965,365) $1,079,013,815
SHORT TERM INVESTMENTS (4.8%)*
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
$20,000,000 Federal National Mortgage Association, effective
yield of 5.06%, August 29, 1996 $ 19,408,500
35,911,000 Interest in $942,854,000 joint repurchase agreement
dated January 31, 1996 with Morgan Stanley & Co. Inc.
due February 1, 1996 with respect to various
U.S. Treasury obligations--maturity value of $35,916,836
for an effective yield of 5.85% 35,916,836
------------------
Total Short Term Investments (cost $55,326,503) $ 55,325,336
- ------------------------------------------------------------------------------------------------
Total Investments (cost $906,291,868)*** $1,134,339,151
- ------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $1,144,739,880.
+Non-income producing.
*** The aggregate identified cost on a tax basis is $906,586,618, resulting in gross unrealized
appreciation and depreciation of $245,654,814 and $17,902,281, respectively, or net unrealized
appreciation of $227,752,533.
ADR after the name of a holding stands for American Depository Receipt, representing ownership
of foreign securities on deposit with a domestic custodian bank.
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
January 31,1996 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $906,291,868) (Note 1) $1,134,339,151
- ---------------------------------------------------------------------------------------------------
Cash 391
- ---------------------------------------------------------------------------------------------------
Dividends receivable 1,095,776
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 20,098,468
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,392,309
- ---------------------------------------------------------------------------------------------------
Total assets 1,156,926,095
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 8,844,217
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 505,396
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,611,573
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,023
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,987
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 274,851
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 292,690
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 654,478
- ---------------------------------------------------------------------------------------------------
Total liabilities 12,186,215
- ---------------------------------------------------------------------------------------------------
Net assets $1,144,739,880
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in-capital (Note 4) $884,619,566
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,803,221
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions (Note 1) 29,269,810
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 228,047,283
- ---------------------------------------------------------------------------------------------------
Total - Representing net assets applicable to
capital shares outstanding $1,144,739,880
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($1,069,882,834 divided by 120,252,390 shares) $8.90
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of $8.90)* $9.44
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price of class B shares
($71,336,024 divided by 8,181,726 shares)** $8.72
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price of class M shares
($3,521,022 divided by 397,402 shares) $8.86
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/96.50 of $8.86)* $9.18
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the
offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended January 31,1996 (Unaudited)
<S> <C>
Investment Income
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $35,882) $ 7,841,968
- ---------------------------------------------------------------------------------------------------
Interest 1,367,021
- ---------------------------------------------------------------------------------------------------
Total investment income 9,208,989
Expenses:
- ---------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 3,158,307
- ---------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 737,757
- ---------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 12,975
- ---------------------------------------------------------------------------------------------------
Auditing 46,884
- ---------------------------------------------------------------------------------------------------
Legal 6,676
- ---------------------------------------------------------------------------------------------------
Postage 26,291
- ---------------------------------------------------------------------------------------------------
Reports to shareholders 24,959
- ---------------------------------------------------------------------------------------------------
Administrative services (Note 2) 12,896
- ---------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,255,704
- ---------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 290,777
- ---------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 6,428
- ---------------------------------------------------------------------------------------------------
Registration Fees 53,143
- ---------------------------------------------------------------------------------------------------
Other expenses 10,306
- ---------------------------------------------------------------------------------------------------
Total expenses 5,643,103
- ---------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (55,151)
- ---------------------------------------------------------------------------------------------------
Net expenses 5,587,952
- ---------------------------------------------------------------------------------------------------
Net investment income 3,621,037
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 106,853,717
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 12,999,585
- ---------------------------------------------------------------------------------------------------
Net gain on investments 119,853,302
- ---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $123,474,339
- ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
January 31 July 31
1996* 1995
<S> <C> <C>
- --------------------------------------------------------------------------------------------------- -------------------
Increase in net assets
- --------------------------------------------------------------------------------------------------- -------------------
Operations:
- --------------------------------------------------------------------------------------------------- -------------------
Net investment income $ 3,621,037 $ 8,511,599
- --------------------------------------------------------------------------------------------------- -------------------
Net realized gain on investment transactions 106,853,717 62,213,631
- --------------------------------------------------------------------------------------------------- -------------------
Net unrealized appreciation of investments 12,999,585 144,813,070
- --------------------------------------------------------------------------------------------------- -------------------
Net increase in net assets resulting from operations 123,474,339 215,538,300
- --------------------------------------------------------------------------------------------------- -------------------
Distributions to shareholders
- --------------------------------------------------------------------------------------------------- -------------------
From net investment income:
Class A (8,975,599) --
- --------------------------------------------------------------------------------------------------- -------------------
Class B (267,085) --
- --------------------------------------------------------------------------------------------------- -------------------
Class M (18,391) --
- --------------------------------------------------------------------------------------------------- -------------------
From net realized gain on investments:
Class A (118,571,814) (71,933,078)
- --------------------------------------------------------------------------------------------------- -------------------
Class B (7,315,505) (2,296,405)
- --------------------------------------------------------------------------------------------------- -------------------
Class M (290,892) (3,411)
- --------------------------------------------------------------------------------------------------- -------------------
Increase from capital share transactions (Note 4) 151,095,366 57,153,414
- --------------------------------------------------------------------------------------------------- -------------------
Total increase in net assets 139,130,419 198,458,820
- --------------------------------------------------------------------------------------------------- -------------------
Net Assets
- --------------------------------------------------------------------------------------------------- -------------------
Beginning of period 1,005,609,461 807,150,641
- --------------------------------------------------------------------------------------------------- -------------------
End of period (including undistributed net investment
income of $2,803,221 and $8,443,259, respectively) $1,144,739,880 $1,005,609,461
- --------------------------------------------------------------------------------------------------- -------------------
* Unaudited.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
(For a share outstanding throughout the period)
- -----------------------------------------------------------------------------------------------
For the Period
Six December 2, 1994 Six
months (commencement months
ended operations) to ended Year ended
January 31 July 31 January 31 July 31
- -----------------------------------------------------------------------------------------------
1996* 1995 1996* 1995
- -----------------------------------------------------------------------------------------------
Class M Class B
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $9.02 $7.78 $8.88 $7.78
- -----------------------------------------------------------------------------------------------
Investment operations
- -----------------------------------------------------------------------------------------------
Net investment income (loss) .03 .01 -- .01
- -----------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.00 1.96 1.00 1.82
- -----------------------------------------------------------------------------------------------
Total from investment
operations 1.03 1.97 1.00 1.83
- -----------------------------------------------------------------------------------------------
Distributions to shareholders:
- -----------------------------------------------------------------------------------------------
From net investment income (.07) -- (.04) --
- -----------------------------------------------------------------------------------------------
In excess of net investment
income -- -- -- --
- -----------------------------------------------------------------------------------------------
From net realized gain
on investment (1.12) (.73) (1.12) (.73)
- -----------------------------------------------------------------------------------------------
Total distributions (1.19) (.73) (1.16) (.73)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $8.86 $9.02 $8.72 $8.88
- -----------------------------------------------------------------------------------------------
Total investment return at
net asset value (%)(b) 11.93(a) 28.29(a) 11.76(a) 26.46
- -----------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,521 $873 $71,336 $47,906
- -----------------------------------------------------------------------------------------------
Ratio of expenses to averag
net assets (%)(c) .73(a) 1.56(a) .89(a) 1.75
- -----------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .11(a) .29(a) (.03)(a) .22
- -----------------------------------------------------------------------------------------------
Portfolio turnover (%) 58.69(a) 96.75 58.69(a) 96.75
- -----------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (Continued)
- -------------------------------------------------------------------------------------------
For the Period
March 1, 1993 Six
(commencement months
Year ended operations) to ended
July 31 July 31 January 31
- -------------------------------------------------------------------------------------------
1994 1993 1996* 1995
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.85 $8.32 $9.05 $7.85
- -------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------
Net investment income (loss) .03 (.03) .03 .08
- -------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21 .61 1.03 1.85
- -------------------------------------------------------------------------------------------
Total from investment
operations .24 .58 1.06 1.93
- -------------------------------------------------------------------------------------------
Distributions to shareholders:
- -------------------------------------------------------------------------------------------
From net investment income (.02) -- (.09) --
- -------------------------------------------------------------------------------------------
In excess of net investment
income -- (.05) -- --
- -------------------------------------------------------------------------------------------
From net realized gain
on investment (1.29) -- (1.12) (.73)
- -------------------------------------------------------------------------------------------
Total distributions (1.31) (.05) (1.21) (.73)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $7.78 $8.85 $8.90 $9.05
- -------------------------------------------------------------------------------------------
Total investment return at
net asset value (%)(b) 2.38 6.96(a) 12.17(a) 27.55
- -------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $21,033 $4,789 $1,069,883 $956,830
- -------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) 1.77 .73(a) .51(a) .99
- -------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .08 (.12)(a) .36(a) 1.03
- -------------------------------------------------------------------------------------------
Portfolio turnover (%) 100.16 134.14 58.69(a) 96.75
- -------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (Continued)
- -------------------------------------------------------------------------------------------
Year ended July 31
- -------------------------------------------------------------------------------------------
1994 1993 1992 1991
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.87 $8.57 $9.20 $8.75
- -------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------
Net investment income (loss) .06 .08 .12 .15
- -------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .26 1.45 .21 .89
- -------------------------------------------------------------------------------------------
Total from investment
operations .32 1.53 .33 1.04
- -------------------------------------------------------------------------------------------
Distributions to shareholders:
- -------------------------------------------------------------------------------------------
From net investment income (.05) (.04) (.15) (.17)
- -------------------------------------------------------------------------------------------
In excess of net investment
income -- (.03) -- --
- -------------------------------------------------------------------------------------------
From net realized gain
on investment (1.29) (1.16) (.81) (.42)
- -------------------------------------------------------------------------------------------
Total distributions (1.34) (1.23) (.96) (.59)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $7.85 $8.87 $8.57 $9.20
- -------------------------------------------------------------------------------------------
Total investment return at
net asset value (%)(b) 3.33 19.24 4.49 13.32
- -------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $786,118 $804,731 $714,479 739,775
- -------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) .99 .90 .94 .89
- -------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .88 .84 1.33 1.78
- -------------------------------------------------------------------------------------------
Portfolio turnover (%) 100.16 134.14 100.26 58.30
- -------------------------------------------------------------------------------------------
* Unaudited
(a) Not Annualized.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of
sales charges.
(c) The ratio of expenses to average net assets for the period ended January 31, 1996 includes
amounts paid through brokerage service and expense offset arrangements. Prior period ratios
exclude these amounts. (Note 2).
</TABLE>
Notes to financial statements
January 31, 1996 (Unaudited)
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The
fund seeks 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 class A, class B and class M shares. Class A shares are
sold with a maximum front-end sales charge of 5.75%. Class B shares,
which convert to class A shares after eight years, do not pay a front-
end sales charge, but pay a higher ongoing distribution fee than class A
shares and are subject to a contingent deferred sales charge, if those
shares are redeemed within six years of purchase. Class M shares are
sold with a maximum front-end sales charge of 3.50 % and pay an ongoing
distribution fee that is lower than class B shares and higher than class
A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities. Actual results could differ from those
estimates.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price, or, if no sales are reported--as in the
case of some securities traded over-the-counter--the last reported bid
price. 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 in an
amount at least equal to 102% of the resale price, including accrued
interest. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to
the resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy
or sell is executed). Interest income is recorded on the accrual basis
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) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and for excise tax on income and capital
gains.
F) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid annually. The amount and character of income and gains to be
distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
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 Putnam Management on the
fund's portfolio transactions.
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the six months ended January 31, 1996, fund expenses were reduced by
$55,151 under expense offset arrangements with PFTC and brokerage
service arrangements. Investor servicing and custodian fees reported in
the Statement of Operations exclude these credits. The fund could have
invested the assets utilized in connection with the expense offset
arrangements in an income producing asset if it had not entered into
such arrangements.
Trustees of the fund receive an annual Trustees fee of $2,230 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of
the Trustees receive additional fees for attendance at certain committee
meetings.
The fund adopted a Trustee Fee Deferral Plan (the "Plan") which allows
the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund
and are invested in the fund or in other Putnam funds until distribution
in accordance with the Plan.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plans provide for payments by
the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%,
1.00% and 1.00% of the average net assets attributable to class A, class
B and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of 0.25%, 1.00% and 0.75% of the average
net assets attributable to class A, class B and class M shares,
respectively.
For the six months ended January 31, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $83,198 and $5,286
from the sale of class A and class M shares, respectively and received
$24,719 in contingent deferred sales charges from redemptions of class B
shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A shares. For the six months ended January 31,
1996, Putnam Mutual Funds Corp., acting as underwriter received $959 on
class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended January 31, 1996, purchases and sales of
investment securities other than short-term investments aggregated
$593,899,021 and $597,949,980, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or
loss on securities sold, the cost of securities has been determined on
the identified cost basis.
Note 4
Capital shares
At January 31, 1996, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended
January 31, 1996
- ----------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------
Shares sold 12,232,266 $109,491,612
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 12,717,860 109,246,239
- -----------------------------------------------------
24,950,126 218,737,851
Shares
repurchased (10,467,889) (94,504,465)
- -----------------------------------------------------
Net increase 14,482,237 $124,233,386
- -----------------------------------------------------
Year ended
July 31, 1995
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 16,107,622 $126,498,124
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 8,899,073 61,404,571
- -----------------------------------------------------
25,006,695 187,902,695
Shares
repurchased (19,318,250) (152,210,023)
- -----------------------------------------------------
Net increase 5,688,445 $35,692,672
- -----------------------------------------------------
Six months ended
January 31, 1996
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 3,290,708 $28,952,459
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 847,896 7,147,764
- -----------------------------------------------------
4,138,604 36,100,223
Shares
repurchased (1,351,332) (11,932,202)
- -----------------------------------------------------
Net increase 2,787,272 $24,168,021
- -----------------------------------------------------
Year ended
July 31, 1995
- -----------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------
Shares sold 4,383,126 $34,049,532
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 314,401 2,137,928
- -----------------------------------------------------
4,697,527 36,187,460
Shares
repurchased (2,007,255) (15,512,101)
- -----------------------------------------------------
Net increase 2,690,272 $20,675,359
- -----------------------------------------------------
Six months ended
January 31, 1996
- ----------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------
Shares sold 314,126 $2,825,107
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 35,438 303,352
- -----------------------------------------------------
349,564 3,128,459
Shares
repurchased (48,998) (434,500)
- -----------------------------------------------------
Net increase 300,566 $2,693,959
- -----------------------------------------------------
December 2, 1994
(commencement of
operations) to July 31, 1995
- -----------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------
Shares sold 131,458 $1,070,749
- -----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------
131,458 1,070,749
Shares
repurchased (34,622) (285,366)
- -----------------------------------------------------
Net increase 96,836 $785,383
- -----------------------------------------------------
Our commitment to quality service
*CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service Seal
for the past six years. In 1995, over 146,000 tests of 56 shareholder
service components demonstrated that Putnam outperformed the industry
standard in every category.
*HELP YOUR INVESTMENT GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings
account.*
*SWITCH FUNDS EASILY
You can move money from one account to another with the same class of
shares without a service charge. (This privilege is subject to change or
termination.)
*ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at
the then-current net asset value, which may be more or less than the
original cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a
helpful Putnam representative.
To make an additional investment in this or any other Putnam fund,
contact your financial advisor or call our toll-free number: 1-800-225-
1581.
*Regular investing of course, does not guarantee a profit or
protect against a loss in a declining market.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
C. Beth Cotner
Vice President and Fund Manager
Carol C. McMullen
Vice President and Fund Manager
David J. Santos
Vice President and Fund Manager
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam 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. For
more information, or to request a prospectus, call toll free: 1-800-225-
1581.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution, are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency, and involve risk, including the possible loss of
principal amount invested.
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- ------------------
23300-003/307/385 3/96
