PUTNAM
VISTA
FUND
[Artwork]
SEMIANNUAL REPORT
January 31, 1995
[Putnam Logo]
Boston * London * Tokyo
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PERFORMANCE HIGHLIGHTS
The Wall Street Journal highlighted Putnam Vista Fund (class A shares) in its
January 27, 1995, edition as a "fund for bull and bear markets." The fund was
one of only 13 funds that beat the broad market in periods of both rising and
falling prices from 1985 through 1994.
The long-term performance of the fund's class A shares speaks for itself. Accor-
ding to Lipper Analytical Services, the fund's class A shares ranked in the top
26% of 132 growth funds for 10-year performance and in the top 21% of 228 funds
for 5-year performance as of January 31, 1995. *
Performance should always be considered in light of a fund's investment strate-
gy. Putnam Vista Fund is designed for investors seeking capital appreciation
through common stocks selected for above-average growth potential.
SEMIANNUAL RESULTS AT A GLANCE
CLASS A CLASS B
TOTAL RETURN: NAV POP NAV CDSC
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(change in value during period
plus reinvested distributions)
6 months ended 1/31/95 1.22% -4.57% 0.80% -4.20%
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CLASS A CLASS B CLASS M
SHARE VALUE: NAV POP NAV NAV POP
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7/31/94 $7.09 $7.52 $7.03 __ __
12/8/94 __ __ __ $6.73 $6.97
1/31/95 7.12 7.55 7.03 7.10 7.36
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CAPITAL GAINS
DISTRIBUTIONS: NO. INCOME LONG-TERM SHORT-TERM TOTAL
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Class A 1 __ $0.043 $0.012 $0.055
Class B 1 __ 0.043 0.012 0.055
Class M 1 __ 0.043 0.012 0.055
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Performance data represent past results and will differ for each share class.
Performance for class M shares, which became effective 12/1/94, is not shown
because of the brevity of the reporting period. For performance over longer
periods, see page 8. POP assumes 5.75% maximum sales charge for class A shares
and 3.50% for class M shares. CDSC for class B shares assumes 5% maximum con-
tingent deferred sales charge.
* Lipper Analytical Services is an independent research organization; rankings
vary over time and do not reflect the effects of sales charges. The fund's
class A shares ranked 344 out of 486 growth funds (top 71%) for 1-year perfor-
mance, 46 out of 228 for 5-year performance (top 21%), and 34 out of 132 for
10-year performance (top 26%). Class B shares ranked 362 out of 486 for 1-
year (top 75%). Past performance is not indicative of future results.
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FROM THE CHAIRMAN [Photograph of George Putnam]
* (C) Karsh, Ottawa
DEAR SHAREHOLDER:
FROM A VANTAGE POINT HALFWAY THROUGH PUTNAM VISTA FUND'S FISCAL YEAR, WE LOOK
BACK ON AN UNSETTLED STOCK MARKET ATTEMPTING TO BALANCE THE NEGATIVE EFFECT OF
RISING INTEREST RATES WITH THE POSITIVE RESULTS OF CONTINUED ECONOMIC STRENGTH.
LOOKING AHEAD, WE ANTICIPATE LINGERING MARKET VOLATILITY AS INVESTORS CONTINUE
TO TAKE A WAIT-AND-SEE APPROACH TOWARD EQUITIES. THE ARRIVAL OF SUMMER, AND THE
END OF FISCAL '95, MAY BRING A BETTER MOOD IN THE STOCK MARKET AS MANY OF THE
CURRENT UNCERTAINTIES BECOME RESOLVED.
WE BELIEVE THE SUSTAINED NOTCHING UP OF SHORT-TERM INTEREST RATES SHOULD HAVE
RUN ITS COURSE BY THEN AS THE FEDERAL RESERVE BOARD ACHIEVES ITS POLICY GOAL OF
SLOWING GROWTH TO STAVE OFF INFLATION.
FUND MANAGERS JENNIFER SILVER, MICHAEL MUFSON, AND ANTHONY SANTOSUS HAVE ALREADY
STARTED SHIFTING THE PORTFOLIO TOWARD INDUSTRY SECTORS THAT TEND TO DO WELL
DURING THE LATTER STAGES OF A RECOVERY. IN THE REPORT THAT FOLLOWS, JENNIFER,
MIKE, AND TONY REVIEW THE FISCAL YEAR TO DATE AND DISCUSSES THEIR PLANS FOR THE
SECOND HALF.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
MARCH 15, 1995
* (C) Copyright
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REPORT FROM THE FUND MANAGERS
JENNIFER SILVER, LEAD MANAGER
MICHAEL J. MUFSON
ANTHONY C. SANTOSUS
Skittish stock investors alternated between sharp, unsustained selling panics
and brief, euphoric rallies throughout the six months ended January 31, 1995.
Prompted by the debilitating slide of the U.S. dollar, an unexpected shift to
the right in Washington, and the Mexican peso crisis -- not to mention the Fede-
ral Reserve Board's monetary policies -- the market's volatility resulted in a
relatively narrow trading range for stocks and what could be considered bland
total returns for the major market indexes. Most equity management styles had
difficulty making headway as an emphasis on neither value nor growth seemed to
prevail. Consequently, Putnam Vista Fund's subdued returns were in good company
during the period, which encompassed the first half of the fund's fiscal year.
GROWTH POTENTIAL OF MIDCAPS SPARKED LITTLE INTEREST
The stocks of small, medium, and large companies alike made little overall pro-
gress throughout the period, hampered by both domestic and international events.
However, it was the medium-sized growth companies -- those with market capitali-
zations from $300 million to $5 billion -- that bore the heaviest burden of the
past year's turmoil. Conservative stock investors flocked to the relative safety
of larger, established blue chips, while opportunity seekers took advantage of
the historically attractive valuations in smaller, faster-growing companies. The
mid-sized companies that form the backbone of the fund's portfolio languished
between these extremes.
When selecting stocks for the fund, we look for those that are reasonably pri-
ced, with demonstrated consistency in delivering strong earnings, and the poten-
tial for future earnings growth. Historically, these characteristics have been
accompanied by positive stock price performance. In 1994 , however, investors
appeared unmoved by the appealing growth prospects of medium-sized companies
possessing these attributes. Instead, they focused on the relative price stabi-
lity offered by larger firms or the rapid price appreciation potential of smal-
ler ones.
We believe the resulting correction in this mid-capitalization market, while
certainly not desirable, helped re-establish the equilibrium in valuation among
small, medium, and large companies. In our view,
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this has thus set the stage for stronger future performance. Currently, many
mid-cap stocks feature more attractive price-to-earnings (P/E) ratios than they
have in previous years. This useful measure of potential stock price value indi-
cates how much an investor will have to pay for every dollar of a company's an-
ticipated earnings per share.
STRICT BUY/SELL DISCIPLINE TARGETS LONG-TERM RESULTS
Shifts in the market's favor or disfavor of this industry or that sector occurr-
ed with dizzying frequency and fervor throughout the period. Weathering such an
erratic environment required an experienced, "steady-as-she-goes" approach to
investing -- one with which we're well acquainted.
Our investment strategy for your fund is based on a bottom-up approach to port-
folio building. We select stocks on a company-by-company basis, combining quan-
titative analysis with in-depth fundamental research. We consistently pay care-
ful attention to portfolio construction, looking at how each stock might aid in
managing the risk component of the portfolio. We believe this diligence has
helped us identify and pick from the most promising
[Line Chart - Page 5]
MIDCAP STOCKS VERSUS THE MARKET
S&P MIDCAP INDEX S&P 500 INDEX
12/90 $ 10,000 $ 10,000
12/91 14,997 13,034
12/92 16,781 14,025
12/93 19,113 15,432
12/94 18,433 15,642
Chart compares the change in value of a hypothetical $10,000 investment in
stocks of medium-sized companies (market capitalizations from $300 million
to $5 billion) with a similar investment in the stock market at large between
December 31, 1990, and December 31, 1994. Sources: S&P 500 Index, S&P Midcap
Index. Indexes are unmanaged; performance and holdings in the indexes will
differ from the holdings of the fund.
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midcap growth stocks, while helping reduce the portfolio's exposure to market
volatility. In fact, in 1994, more than 90% of portfolio companies posted posi-
tive earnings surprises or earnings that were in line with expectations. We also
constantly monitor the portfolio for holdings to be sold after they've increased
by a predetermined amount.
We believe your fund's above-average, long-term total returns are testimony to
the viability and success of our investment process.
PORTFOLIO REMAINS ANCHORED IN TECHNOLOGY AND HEALTH CARE
While individual stock selection drives our investment approach, we remain com-
mitted to areas where we believe the fundamental growth potential is better than
average. A substantial portion of the fund's net assets is positioned in the
technology and health care sectors of the market -- two industries we believe
are poised to experience strong earnings growth in the months and years ahead.
The outlook for the technology sector is bright because of the strengthening de-
mand for personal computers, components, software, and communications equipment.
As it became clear that health care legislation was dead in Washington and in-
dustry consolidation was under way, health care regained its appeal. Many cost-
effective health maintenance organizations and medical device and equipment com-
panies experienced double-digit gains over the past several months.
Teradyne, based in Boston, is a technology company we favor. Teradyne's business
is the creative application of systems technology to practical problems in the
design, manufacture, and servicing of electronics. Teradyne distributes its pro-
ducts through worldwide sales organizations and provides support from technical
centers throughout the United States, Europe, and the Pacific Rim.
Nokia is another technology-related portfolio holding we believe is poised for
growth. With a 20% global market share, the company is the world's second lar-
gest mobile phone manufacturer. Nokia's sales are growing fastest in the Far
East, but Europe remains its core market.
Oxford Health Plans, a managed-care organization, is one health care company
from which we anticipate solid gains. Oxford Health has experienced an excep-
tional rate of earnings-per-share growth in 1994, driven exclusively by enroll-
ment increases. Private Practice Partnership, one of many innovative programs
developed by Oxford Health, has gained popularity among the medical community
because it has helped physicians adapt to the rapidly changing managed-care
environment while allowing them to retain their own individual practices.
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TOP 10 HOLDINGS (1/31/95)
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MORRISON RESTAURANTS, INC.
Cafeteria and specialty restaurant chain
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PRAXAIR, INC.
Industrial gas supplier
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SUNBEAM-OSTER, INC.
International consumer products company
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HEALTHCARE + RETIREMENT CORP.
Provides long-term elderly care
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FIRST FINANCIAL MANAGEMENT CORP.
Distributes information services
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TERADYNE, INC.
Electronic systems and software
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BANK OF NEW YORK COMPANY, INC.
Engaged in commercial, trust, and international banking
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FIRST BANK SYSTEMS, INC.
Holding company providing banking, trust, and other financial services
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LOWE'S COMPANIES, INC.
Lumber and building materials store chain
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SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORP.
Provider of telephone and cellular phone services
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These holdings represent 14.7% of the fund's net assets. Portfolio holdings
will vary over time.
OUTLOOK: A SOFT LANDING REMAINS POSSIBLE
As we enter the remaining months of fiscal 1995, investors should keep in mind
that successful stock investing requires a long-term view. Should the Fed's
aggressive actions show signs of retarding, rather than merely slowing, economic
growth, the markets may be choppy over the near term.
That said, we remain convinced that mid-cap stocks offer the best risk/return
profile over the long term relative to their large- and small-cap brethren. We
believe the recent underperformance of these stocks is transitory; in fact, if
history is any comfort, midcap stocks have never experienced two consecutive
years of underperformance. While past performance of course does not predict
future results, we believe the companies in the fund's portfolio show definite
ability to compete in today's marketplace, continually developing and adding to
their products and services. In our view, it is only a matter of time before the
market rediscovers the attractive characteristics of these stocks.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed fa-
vorably as of January 31, 1995, there is no guarantee the fund will continue to
hold these securities in the future.
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PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time, assum-
ing you held the shares through the entire period and reinvested all distribu-
tions back into the fund. We show total return in two ways: on a cumulative
long-term basis and on average how the fund might have grown each year over va-
rying periods. For comparative purposes, we show how the fund performed relative
to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDED 1/31/95
STANDARD
& POOR'S
CLASS A CLASS B 500
NAV POP NAV CDSC INDEX CPI
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6 months 1.22% -4.57% 0.80% -4.20% 4.14% 1.28%
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1 year -6.68 -12.05 -7.37 -11.96 0.55 2.80
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5 years 79.16 68.78 -- -- 66.70 17.98
Annual average 12.37 11.04 -- -- 10.76 3.36
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10 years 248.51 228.41 -- -- 263.87 42.46
Annual average 13.30 12.63 -- -- 13.79 3.60
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Life of class B -- -- 8.30 4.35 12.26 5.03
Annual average -- -- 4.24 2.24 6.21 2.59
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TOTAL RETURN FOR PERIODS ENDED 12/31/94
(most recent calendar quarter)
CLASS A CLASS B
NAV POP NAV CDSC
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1 year -3.77% -9.31% -4.45% -9.19%
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5 years 69.95 60.19 -- --
Annual average 11.19 9.88 -- --
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10 years 294.30 271.64 -- --
Annual average 14.71 14.03 -- --
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Life of class B -- -- 9.38 5.39
Annual average -- -- 5.02 2.91
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Fund performance data do not take into account any adjustment for taxes payable
on reinvested distributions or, for class A shares, distribution fees prior to
implementation of the class A distribution plan in 1990. Effective 3/1/93, the
fund began offering class B shares and on 12/1/94, class M shares. Performance
of share classes will differ; performance for class M shares is not shown becau-
se of the brevity of the reporting period. Performance data represent past re-
sults. Investment returns and net asset value will fluctuate so an investor's
shares, when sold, may be worth more or less than their original cost.
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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 liabili-
ties, 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 maximum sales charge of 5.75% 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 fre-
quently 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.
STANDARD & POOR'S MIDCAP 400 INDEX is a market-value weighted index of 400
domestic stocks with a median market capitalization of $676 million, reflecting
a broad cross-section of industries. Securities in the fund do not match those
in the index and may pose different risks.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it does not
represent an investment return.
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PORTFOLIO OF INVESTMENTS OWNED
January 31, 1995 (Unaudited)
COMMON STOCKS (89.0%) *
NUMBER OF SHARES VALUE
AUTOMOTIVE PARTS (1.7%)
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287,100 Magna International, Inc. Class A $ 10,335,600
107,700 Varity Corp.+ 3,661,800
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13,997,400
BANKS (7.2%)
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399,200 Bank of New York Company, Inc. 11,976,000
174,800 Baybanks, Inc. 9,788,800
304,100 Crestar Financial Corp. 11,631,825
329,400 First Bank System, Inc. 11,899,575
84,000 First Interstate Bancorp 6,216,000
342,400 UJB Financial Corp. 8,602,800
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60,115,000
BROADCASTING (2.3%)
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90,260 CBS Inc. 5,268,926
167,300 Clear Channel Communications, Inc.+ 8,490,475
197,900 Renaissance Communications Corp.+ 5,590,675
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19,350,076
BUSINESS EQUIPMENT AND SERVICES (1.9%)
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250,650 Office Depot, Inc.+ 6,516,900
213,000 Tandy Corp. 9,425,250
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15,942,150
BUSINESS SERVICES (8.2%)
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313,350 CUC International, Inc.+ 10,849,742
199,500 First Financial Management Corp. 12,319,125
201,600 General Motors Corp. Class E 7,786,800
368,600 Manpower, Inc. 9,399,300
266,200 Olsten Corp. (The) 8,817,875
218,250 Paychex, Inc. 8,511,750
476,400 Reynolds & Reynolds Co. Class A 11,314,500
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68,999,092
CABLE TELEVISION (1.4%)
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774,900 Comcast Corp. Special Class A 11,623,500
CELLULAR COMMUNICATIONS (2.1%)
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137,500 Andrew Corp.+ 7,287,500
329,900 DSC Communications Corp.+ 10,598,038
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17,885,538
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COMMON STOCKS
NUMBER OF SHARES VALUE
CHEMICALS (2.7%)
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142,000 Lyondell Petrochemical Co. $ 3,141,750
567,600 Praxair, Inc. 11,422,950
316,100 Wellman, Inc. 8,297,625
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22,862,325
COMBINED UTILITIES (1.6%)
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552,400 CMS Energy Corp. 12,981,400
COMMUNICATIONS (2.8%)
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285,900 General Instrument Corp.+ 7,790,775
373,700 Scientific Atlanta, Inc. 7,520,713
208,800 Stratacom, Inc.+ 7,464,600
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22,776,088
COMPUTER SERVICES (0.7%)
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285,500 Cognex Corp.+ 6,066,875
COMPUTER SOFTWARE (2.9%)
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168,500 Cerner Corp.+ 7,624,623
132,300 FTP Software, Inc.+ 3,687,863
104,200 Netmanage, Inc.+ 3,972,625
261,700 Network General Corp.+ 6,215,375
57,700 Oracle Systems Corp.+ 2,459,463
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23,959,949
COMPUTERS (2.0%)
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373,200 EMC Corp.+ 6,950,850
313,500 Silicon Graphics, Inc.+ 9,796,875
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16,747,725
ELECTRICAL EQUIPMENT (1.3%)
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183,500 Grainger (W.W.), Inc. 10,941,188
ELECTRONICS (5.6%)
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274,300 Applied Materials, Inc.+ 10,560,550
217,100 LSI Logic Corp.+ 9,226,750
179,850 Micron Technology, Inc. 7,935,881
374,300 Teradyne, Inc.+ 12,164,750
305,300 Verifone, Inc. 6,640,275
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46,528,206
ETHICAL PHARMACEUTICALS (0.9%)
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217,200 Elan Corp., PLC ADR 7,656,300
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COMMON STOCKS
NUMBER OF SHARES VALUE
FINANCIAL SERVICES (2.1%)
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337,700 First USA, Inc. $ 11,650,650
158,000 Sunamerica, Inc. 6,241,000
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17,891,650
FOOD AND BEVERAGES (2.9%)
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215,700 Canandaigua Wine, Inc. Class A+ 7,873,050
279,200 IBP, Inc. 8,341,100
245,800 Safeway, Inc.+ 7,896,325
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24,110,475
HEALTH CARE (7.0%)
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422,700 Health Care & Retirement Corp.+ 12,363,975
88,800 Oxford Health Plan+ 7,536,900
257,300 Sierra Health Services+ 7,815,488
240,750 U.S. Healthcare Inc. 11,014,313
241,500 United Healthcare Corp. 11,712,750
235,900 Value Health, Inc.+ 8,639,838
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59,083,264
HEALTH CARE SERVICES (2.9%)
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165,600 American Medical Response+ 4,636,800
167,900 Integrated Health Services, Inc. 6,296,250
308,000 Mid Atlantic Medical Services, Inc.+ 7,315,000
191,300 Quantum Health Resources, Inc.+ 5,810,738
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24,058,788
HOUSEHOLD PRODUCTS (2.6%)
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231,000 Premark International, Inc. 9,499,875
529,300 Sunbeam-Oster, Inc. 12,372,388
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21,872,263
INSURANCE (0.7%)
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204,400 Equitable of Iowa Cos. 6,029,800
LODGING (2.0%)
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362,600 Hospitality Franchise System, Inc. 10,152,800
354,550 La Quinta Inns, Inc. 6,958,044
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17,110,844
MEDICAL SUPPLIES (0.5%)
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74,000 Sci-Med Life Systems, Inc.+ 4,384,500
METALS AND MINING (0.9%)
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516,000 Magma Copper Co. 7,869,000
OIL AND GAS (1.3%)
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400,200 MCN Corp. 7,053,525
208,300 Union Texas Petroleum Hldgs., Inc. 3,827,513
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10,881,038
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COMMON STOCKS
NUMBER OF SHARES VALUE
PHARMACEUTICALS (1.4%)
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104,700 Mylan Laboratories, Inc. $ 2,931,600
352,100 Teva Pharmaceutical Industries Ltd. ADR 9,066,575
--------------
11,998,175
REAL ESTATE (0.2%)
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69,200 Storage USA, Inc. 1,885,700
RECREATION (2.4%)
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574,900 Brunswick Corp. 11,282,411
374,300 Mirage Resorts, Inc.+ 8,374,963
--------------
19,657,374
RESTAURANTS (1.6%)
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506,900 Morrison Restaurants, Inc. 13,179,400
RETAIL (8.1%)
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267,400 Dollar General Corp. 8,623,650
416,800 Gymboree Corp.+ 10,003,200
323,300 Lowe's Cos., Inc. 11,881,275
475,600 Revco D.S., Inc.+ 10,582,100
393,500 Staples, Inc.+ 9,935,875
325,600 Sunglass Hut International+ 7,570,200
298,700 Talbots, Inc. 9,073,013
--------------
67,669,313
TELEPHONE SERVICES (3.9%)
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374,200 ALC Communications Corp.+ 10,851,800
462,800 LCI International, Inc.+ 10,470,850
352,400 Southern New England Telecommunications Corp. 11,717,300
--------------
33,039,950
TRANSPORTATION (1.2%)
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377,900 Harley-Davidson, Inc. 10,297,775
TRUCKING (2.0%)
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370,000 TNT Freightways Corp. 9,897,500
260,600 Werner Enterprises, Inc. 6,515,000
--------------
16,412,500
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TOTAL COMMON STOCKS (cost $706,264,261) $745,864,621
PREFERRED STOCKS (0.9%)* (cost $8,024,582)
NUMBER OF SHARES VALUE
ELECTRONICS (0.9%)
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108,300 Nokia Corp. ADR $ 7,919,438
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SHORT-TERM INVESTMENTS (7.6%)*
PRINCIPAL AMOUNT VALUE
$10,000,000 Ciesco, Inc. 6.92s, February 7, 1995 $ 9,989,883
19,530,000 Federal National Mortgage Association 5.9s,
February 8, 1995 19,507,595
20,000,000 Heller Financial, Inc. 5.78s, February 3, 1995 19,993,578
13,953,000 Interest in $605,000,000 joint repurchase agreement
dated January 31, 1995 with Goldman Sachs & Co.,
due February 1, 1995 with respect to various U.S.
Treasury obligations -- maturity value of $13,955,217
for an effective yield of 5.72% 13,955,217
--------------
TOTAL SHORT-TERM INVESTMENTS (cost $63,446,273) $ 63,446,273
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TOTAL INVESTMENTS (cost $777,735,116)*** $817,230,332
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* Percentages indicated are based on net assets of $838,240,171, which corres-
pond to a net asset value per class A, class B and class M share of $7.12,
$7.03 and $7.10, respectively.
+ Non-income-producing security.
*** The aggregate identified cost on a tax basis is $779,667,769 resulting in
gross unrealized appreciation and depreciation of $66,409,296 and
$28,846,733 respectively, or net unrealized appreciation of $37,562,563.
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.
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STATEMENT OF ASSETS AND LIABILITIES
January 31, 1995 (Unaudited)
ASSETS
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Investments in securities, at value
(identified cost $777,735,116) (Note 1) $817,230,332
Cash 645
Dividends and interest receivable 485,705
Receivable for shares of the fund sold 3,159,770
Receivable for securities sold 25,791,265
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TOTAL ASSETS $846,667,717
LIABILITIES
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Payable for securities purchased 3,319,172
Payable for shares of the fund repurchased 3,061,899
Payable for compensation of Manager (Note 2) 1,272,422
Payable for administrative services (Note 2) 9,154
Payable for investor servicing and custodian fees (Note 2) 378,349
Payable for Trustees 345
Payable for distribution fees (Note 2) 285,338
Other accrued expenses 100,867
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TOTAL LIABILITIES 8,427,546
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NET ASSETS $838,240,171
REPRESENTED BY
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Paid-in capital (Notes 1, 4 and 5) $791,914,456
Undistributed net investment income (Notes 1 and 5) 817,957
Accumulated net realized gain on investment transactions
(Notes 1 and 5) 6,012,542
Net unrealized appreciation of investments 39,495,216
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TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $838,240,171
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
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Net asset value and redemption price of class A shares
($672,626,812 divided by 94,501,939 shares) $7.12
Offering price per class A share (100/94.25 of $7.12)* $7.55
Net asset value and offering price of class B shares
($165,427,383 divided by 23,535,755 shares)** $7.03
Net asset value and redemption price of class M shares
($185,976 divided by 26,179 shares) $7.10
Offering price per class M share (100/96.50 of $7.10)* $7.36
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* On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS
Six months ended January 31, 1995 (Unaudited)
INVESTMENT INCOME:
-------------------------------------------------------------------------------
Dividends (net of foreign tax of $25,102) $ 4,369,385
-------------------------------------------------------------------------------
Interest 1,390,449
-------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 5,759,834
-------------------------------------------------------------------------------
EXPENSES:
-------------------------------------------------------------------------------
Compensation of Manager (Note 2) 2,530,255
-------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 626,519
-------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 12,992
-------------------------------------------------------------------------------
Reports to shareholders 67,144
-------------------------------------------------------------------------------
Auditing 17,225
-------------------------------------------------------------------------------
Legal 9,577
-------------------------------------------------------------------------------
Postage 22,167
-------------------------------------------------------------------------------
Registration fees 13,186
-------------------------------------------------------------------------------
Administrative services (Note 2) 14,712
-------------------------------------------------------------------------------
Distribution fees D class A (Note 2) 845,840
-------------------------------------------------------------------------------
Distribution fees D class B (Note 2) 762,347
-------------------------------------------------------------------------------
Distribution fees D class M (Note 2) 80
-------------------------------------------------------------------------------
Other 19,833
-------------------------------------------------------------------------------
TOTAL EXPENSES 4,941,877
-------------------------------------------------------------------------------
NET INVESTMENT INCOME 817,957
-------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 13,401,291
-------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (5,873,613)
-------------------------------------------------------------------------------
NET GAIN ON INVESTMENT TRANSACTIONS 7,527,678
-------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,345,635
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
January 31 July 31
1995* 1994
INCREASE IN NET ASSETS
-------------------------------------------------------------------------------
Operations:
-------------------------------------------------------------------------------
Net investment income $ 817,957 $ 1,184,413
-------------------------------------------------------------------------------
Net realized gain on investments 13,401,291 16,596,788
-------------------------------------------------------------------------------
Net unrealized depreciation of investments (5,873,613) (17,409,528)
-------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 8,345,635 371,673
-------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income:
Class A __ (2,090,147)
-------------------------------------------------------------------------------
Class B __ (155,041)
-------------------------------------------------------------------------------
Net realized gain on investments:
Class A (5,158,362) (34,779,110)
-------------------------------------------------------------------------------
Class B (1,221,959) (4,184,211)
-------------------------------------------------------------------------------
Class M (322) --
-------------------------------------------------------------------------------
In excess of net realized gain on investments:
Class A -- (873,069)
-------------------------------------------------------------------------------
Class B -- (105,037)
-------------------------------------------------------------------------------
Paid-in capital:
Class A -- (744,062)
-------------------------------------------------------------------------------
Class B -- (89,517)
-------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 56,868,398 361,610,769
-------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 58,833,390 318,962,248
-------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------
Beginning of period 779,406,781 460,444,533
-------------------------------------------------------------------------------
END OF PERIOD (including undistributed net invest-
ment income of $817,957 and $0, respectively) $838,240,171 $779,406,781
-------------------------------------------------------------------------------
* Unaudited.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Dec. 8, 1994 Mar. 1, 1993
(commencement Six months (commencement Six months
of operations) to ended Year ended of operations) to ended
January 31*** January 31* July 31 July 31** January 31*
1995 1995 1994 1993 1995 1994
-----------------------------------------------------------------------------------------------------------------------------------
Class M Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $6.73 $7.03 $7.46 $7.12 $7.09 $7.47
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (loss) -- (.01) (.01) (.01) .01 .01
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments .43 .07 .15 .40 .08 .21
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .43 .06 .16 .39 .09 .22
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (loss) -- -- (.02) (.05) -- (.03)
-----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments (.06) (.06) (.55) -- (.06) (.55)
-----------------------------------------------------------------------------------------------------------------------------------
In excess of net gain on investments -- -- (.01) -- -- (.01)
-----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital -- -- (.01) -- -- (.01)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.06) (.06) (.59) (.05) (.06) (.60)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $7.10 $7.03 $7.03 $7.46 $7.12 $7.09
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 6.33(b) .80(b) 1.89 5.45(b) 1.22(b) 2.75
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $ 186 $165,427 $132,596 $20,722 $672,627 $646,811
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) (.23)(b) .91(b) 1.87 .72(b) .53(b) 1.09
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.05)(b) (.21)(b) (.53) (.07)(b) .17(b) .29
-----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.73 56.73 93.86 120.57 56.73 93.86
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
* Unaudited
** Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during
the period.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (Continued)
(For a share outstanding throughout the period)
Eight
months
ended
Year ended July 31 Year ended July 31 July 31
1993 1992 1991 1990 1989 1988 1987 1986 1985
-----------------------------------------------------------------------------------------------------------------------------------
Class A
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $7.59 $6.97 $6.48 $7.05 $5.86 $7.64 $6.74 $5.87 $4.62
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (loss) .07 .14 .17 .21 .23 .16 .13 .20 .11
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 1.28 1.07 .68 (.01) 1.19 (.99) 1.93 1.06 1.15
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.35 1.21 .85 .20 1.42 (.83) 2.06 1.26 1.26
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (loss) (.12) (.19) (.10) (.18) (.23) (.19) (.21) (.20) (.01)
-----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments (1.35) (.40) (.26) (.59) -- (.76) (.95) (.19) --
-----------------------------------------------------------------------------------------------------------------------------------
In excess of net gain on investments -- -- -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital -- -- -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1.47) (.59) (.36) (.77) (.23) (.95) (1.16) (.39) (.01)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $7.47 $7.59 $6.97 $6.48 $7.05 $5.86 $7.64 $6.74 $5.87
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 19.63 18.46 14.27 3.15 24.81 (11.40) 36.86 23.00 27.37(b)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $439,722 $336,360 $287,712 $256,897 $269,392 $249,453 $282,661 $197,912 $178,071
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) .96 .96 .99 .92 .93 1.06 1.05 1.02 .70(b)
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) 1.08 1.92 2.73 3.10 3.55 2.75 2.28 3.34 2.03(b)
-----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.57 143.92 75.89 46.94 69.34 87.45 117.26 276.61 200.46(b)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
January 31, 1995 (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 capital
appreciation by investing primarily in common stocks selected for above-average
growth potential and that involve certain risks. The fund may also trade securi-
ties for short-term profits.
The fund offers class A, class B and class M shares. The fund commenced its pu-
blic offering of class M shares on December 1, 1994. 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 may be subject to a contingent deferred sales charge if those shares
are redeemed within six years of purchase. Class M shares are sold with a maxi-
mum front end sales charge of 3.50% and pay a 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 shareholders of both classes 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 fo-
llowed 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 avail-
able are stated at market value, which is determined using the last reported sa-
le price, or, if no sales are reported -- as in the case of some securities tra-
ded over-the-counter -- the last reported bid price, except that certain U.S.
government obligations are stated at the mean between the 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
<PAGE>
<PAGE>
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., the fund's Manager, a wholly-owned subsidai-
ry 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
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). In-
terest 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) FOREIGN CURRENCY TRANSLATION The fund does not isolate that portion of rea-
lized or unrealized gain or losses resulting from changes in the foreign exchan-
ge rate on investments from fluctuations arising from changes in the market pri-
ces of the securities. Such fluctuations are included with the net realized gain
or loss on investments. Net realized gains and losses on foreign currency tran-
sactions represent net exchange gains on closed forward currency contracts, dis-
position of foreign currencies and the difference between the amount of invest-
ment income and foreign withholding taxes recorded on the fund's books and the
U.S. dollar equivalent amounts actually received or paid.
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 In-
ternal 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. Therefo-
re, no provision has been made for federal taxes on income, capital gains or
unrealized appreciation on securities held and excise tax on income and capital
gains.
G) DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders from net invest-
ment income are recorded by the fund on the ex-dividend date. Capital gain dis-
tributions, if any, are recorded on ex-dividend date and paid annually.
The amount and character of income and gains to be distributed are determined
in accordance with
<PAGE>
<PAGE>
income tax regulations which may differ from generally accepted accounting prin-
ciples. The differences include treatment of dividend income and losses on wash
sales transactions. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available capital loss
carryovers) under income tax regulation.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management, for management and investment advisory servi-
ces is paid quarterly based on the average net assets of the fund for the quar-
ter. 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 brokera-
ge, interest, taxes and distribution fees) 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 port-
folio transactions.
The fund also reimburses the Manager for the compensation and related expenses
of certain officers of the fund and their staff who provide administrative ser-
vices to the fund. The aggregate amount of all such reimbursements is determined
annually by the Trustees.
Trustees of the fund receive an annual Trustee's fee of $1,530 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's assets are provided by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing
agent functions are provided by Putnam Investor Services, a division of PFTC.
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended January 31, 1995 have been reduced by credits allowed
by PFTC.
The fund has adopted a distribution plan with respect to its class A shares (the
"Class A Plan") pursuant to Rule 12b-1 of 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 appro-
ved payment by the fund to Putnam Mutual Funds Corp. at an annual rate of 0.25%
of average net assets attributable to class A shares.
<PAGE>
<PAGE>
During the six months ended January 31, 1995, Putnam Mutual Funds Corp., acting
as the underwriter, received net commissions of $141,612 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, 1995, Putnam Mutual Funds Corp., acting as the
underwriter, received $1,943 on such redemptions.
The fund has adopted a distribution plan with respect to its class B shares (the
"Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The purpose of the Class B Plan is to compensate Putnam Mutual Funds Corp. for
services provided and expenses incurred by it in distributing class B shares.
The Class B Plan provides for payments by the fund to Putnam Mutual Funds Corp.,
at an annual rate of 1.00% of the fund's average net assets attributable to
class B shares.
Putnam Mutual Funds Corp., acting as the underwriter, also receives the proceeds
of the contingent deferred sales charges levied on class B share redemptions
within six years of purchase. The charge is based on declining rates, which be-
gin at 5.0% of the net asset value of the redeemed shares. Putnam Mutual Funds
Corp., received $136,867 in contingent deferred sales charges from such redemp-
tions for the six months ended January 31, 1995. On December 1, 1994, the fund
adopted a separate distribution plan with respect to its class M shares (the
"Class M Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The purpose of the Class M Plan is to compensate Putnam Mutual Funds Corp. for
services and expenses incurred by its distributing class M shares. The Trustees
have approved payment by the fund to Putnam Mutual Funds Corp. at an annual rate
of 0.75% of the funds average net assets attributable to class M shares. For the
period December 8, 1994 (commencement of operations) to January 31, 1995, Putnam
Mutual Funds Corp., acting as the underwriter, received $432 from the sale of
class M shares of the fund.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended January 31, 1995, purchases and sales of investment
securities other than U.S. government obligations and short-term investments
aggregated $455,180,191 and $431,367,045, respectively. There were no purchases
or sales of U.S. government obligations during the period. In determining the
net gain or loss on securities sold, the cost of securities has been determined
on the identified cost basis.
<PAGE>
<PAGE>
NOTE 4
CAPITAL SHARES
At January 31, 1995, there was an unlimited number of shares of beneficial inte-
rest authorized, divided into three classes, class A, class B and class M capi-
tal shares. Transactions in capital shares were as follows:
SIX MONTHS ENDED
JANUARY 31, 1995
CLASS A SHARES AMOUNT
-------------------------------------------------------------------------------
Shares sold 12,877,210 $92,776,263
-------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 693,417 4,819,254
-------------------------------------------------------------------------------
13,570,627 97,595,517
-------------------------------------------------------------------------------
Shares repurchased (10,286,115) (74,057,906)
-------------------------------------------------------------------------------
NET INCREASE 3,284,512 $23,537,611
-------------------------------------------------------------------------------
YEAR ENDED JULY 31, 1994
CLASS A SHARES AMOUNT
-------------------------------------------------------------------------------
Shares sold 19,894,210 $145,612,132
-------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 8,718,792 59,759,452
-------------------------------------------------------------------------------
28,613,002 205,371,584
-------------------------------------------------------------------------------
Shares repurchased (14,103,366) (103,990,990)
-------------------------------------------------------------------------------
NET INCREASE 14,509,636 $101,380,594
-------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 1995
CLASS B SHARES AMOUNT
-------------------------------------------------------------------------------
Shares sold 7,019,166 $49,889,626
-------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 163,715 1,124,722
-------------------------------------------------------------------------------
7,182,881 51,014,348
-------------------------------------------------------------------------------
Shares repurchased (2,510,789) (17,868,631)
-------------------------------------------------------------------------------
NET INCREASE 4,672,092 $33,145,717
-------------------------------------------------------------------------------
<PAGE>
<PAGE>
YEAR ENDED JULY 31, 1994
CLASS B SHARES AMOUNT
-------------------------------------------------------------------------------
Shares sold 17,289,985 $129,073,493
-------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 554,917 4,039,793
-------------------------------------------------------------------------------
17,844,902 133,113,286
-------------------------------------------------------------------------------
Shares repurchased (1,759,586) (12,838,272)
-------------------------------------------------------------------------------
NET INCREASE 16,085,316 $120,275,014
-------------------------------------------------------------------------------
DECEMBER 8, 1994
(COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1995
CLASS M SHARES AMOUNT
-------------------------------------------------------------------------------
Shares sold 26,135 $184,763
-------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 44 307
-------------------------------------------------------------------------------
26,179 185,070
-------------------------------------------------------------------------------
Shares repurchased -- --
-------------------------------------------------------------------------------
NET INCREASE 26,179 $185,070
-------------------------------------------------------------------------------
<PAGE>
<PAGE>
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal for the
past five years, through 1994. DALBAR, an independent research firm, ran more
than 10,000 tests of 38 shareholder service components. In every category,
Putnam outperformed the industry standard.
HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as $25 a month from a
Putnam fund or from your checking or savings account. *
SWITCH FUNDS EASILY.
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or termination.)
ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day at the then-
current net asset value, which may be more or less than their original cost.
For details about any of these or other services, contact your financial advisor
or call the toll-free number shown below and speak with a helpful Putnam repre-
sentative.
To make an additional investment in this or any other Putnam fund, contact your
financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to conti-
nue purchasing shares during periods of low price levels.
<PAGE>
<PAGE>
FUND INFORMATION
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
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
A.J.C. Smith W. Nicholas Thorndike
OFFICERS
George Putnam Charles E. Porter
President Executive Vice President
Patricia C. Flaherty Lawrence J. Lasser
Senior Vice President Vice President
Gordon H. Silver John J. Morgan
Vice President Vice President
Jennifer Silver Michael J. Mufson
Vice President and Fund Manager Vice President and Fund Manager
Anthony C. Santosus William N. Shiebler
Vice President and Fund Manager Vice President
John R. Verani Paul M. OONeil
Vice President Vice President
John D. Hughes Beverly Marcus
Vice President and Treasurer Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Vista 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 ope-
rating policies of the fund, and the most recent copy of Putnam's Quarterly Per-
formance Summary. For more information, or to request a prospectus, call toll
free: 1-800-225-1581.
Shares of mutual funds are not deposits of, or guaranteed or endorsed by, any
financial institution, are not insured by the Federal Deposit Insurance Corpo-
ration (FDIC), the Federal Reserve Board, or any other agency, and involve risk,
including the possible loss of the principal amount invested.
<PAGE>
<PAGE>
---------------
PUTNAM INVESTMENTS Bulk Rate
U.S. Postage
THE PUTNAM FUNDS PAID
One Post Office Square Putnam
Boston, Massachusetts 02109 Investments
---------------
006/317-16915
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND
EDGAR-FILED TEXTS:
(1) Boldface typeface is displayed with capital letters, italic typeface is
displayed in normal type.
(2) Because the printed page breaks are not reflected, certain tabular and
columnar headings and symbols are displayed differently in this filing.
(3) Bullet points and similar graphic signals are omitted.
(4) Page numbering has been omitted.
(5) The trademark symbol has been replaced by (TM).
(6) The copyright symbol has been replaced by (C).
(7) The dagger symbol has been replaced by (+).
(8) The registered mark symbol has been replaced by (R).
