Putnam
Vista
Fund
SEMIANNUAL REPORT
January 31, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* According to Lipper Analytical Services, Putnam Vista Fund's class A share
total return ranked 20 out of 261 growth funds for the five-year period ended
January 31, 1997, placing the fund in the top 8% in this category.*
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
17 Financial statements
*Lipper Analytical Services, an independent research organization, ranks funds
according to total return performance. Their rankings vary over time and do
not reflect the effects of sales charges. For periods ended 1/31/97, class A,
class B, and class M shares ranked 67, 85, and 75, respectively, out of 685
funds for 1-year performance; class B shares ranked 109 out of 443 funds for
3-year performance; class A shares ranked 26 out of 165 for 10-year
performance. Class B and class M shares were not ranked over longer periods.
Past performance is not indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
(copyright) Karsh, Ottawa
Dear Shareholder:
I am pleased to note that during the first half of fiscal 1997 Putnam Vista
Fund continued its tradition of delivering positive performance from a
portfolio made up primarily of stocks of medium-sized growth companies. In
fact, your fund performed consistently better than most of its peers during
the period, as reflected in the Lipper numbers on the facing page.
Your fund's managers achieved these results by adhering strictly to the fund's
strategy of seeking out stocks of companies that have clearly demonstrated
their potential for growth. During the period, technology stocks remained the
greatest source of the fund's positive performance. Within the sector,
however, changes were occurring and the ability of the management team to
detect the shifts early and respond appropriately helped the fund maintain its
competitive edge.
Astute selections in other sectors, particularly the financial services,
health-care, and environmental industries, also contributed to the fund's
favorable results. In the following report, your fund's management team
discusses first-half performance and prospects for the second half.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
March 19, 1997
Report from the Fund Managers
Jennifer K. Silver, lead manager
Anthony C. Santosus
C. Kim Goodwin
David J. Santos
Throughout 1995 and the first half of 1996, as the performance of
smaller-capitalization and midsize growth stocks soared, aggressive growth
funds were among the top-performing mutual funds. However, starting in
mid-1996, their momentum began to falter; the performance of these stocks fell
behind that of larger corporations as increasingly cautious investors sought
safety in the securities of well-established companies. This trend continued
until January of 1997, when midsize growth stocks again began to rally.
While the markets fluctuated, Putnam Vista Fund remained focused on midsize
companies that exhibit favorable growth and quality characteristics. As the
semiannual period came to a close on January 31, 1997, your fund's allegiance
to its time-tested strategy once again showed its effectiveness. The fund's
class A shares generated a 20.47% total return at net asset value (13.52% at
public offering price), outpacing most of its competitive universe. Complete
performance information appears on pages 8 and 9.
* EVOLVING TECHNOLOGY SECTOR CONTINUES TO OFFER OPPORTUNITIES
As has been the case for more than two years, your fund's sturdy performance
was driven in large part by the strength of its holdings in the technology
sector. However, within this sector a shift has taken place. In past fiscal
periods, your fund benefited from investments in companies that focus on
networking services and telecommunications equipment. But during the past six
months, while the environment in the higher-end market has become more
competitive, companies that produce more mundane computer equipment (such as
semiconductors, disk drives, and software) have enjoyed a resurgence.
Among the portfolio's holdings in this sector, several were vital contributors
to the fund's performance. One example is Viasoft, Inc., a software
manufacturer that has developed a solution for the "year 2000" dilemma. This
impending software obstacle, which is becoming an increasingly important issue
for computer users at all levels, will affect system software that does not
recognize calendar dates after December 31, 1999. While most software
developed in the past 20 years already accommodates years beyond 1999, some
older system software allows only a two-digit number for the calendar year and
will read the entry "00" as the year 1900. Viasoft has developed software that
effectively addresses the concerns and needs of companies whose mainframe
recordkeeping systems must be updated in order to function properly in the
21st century. As a result, the company's profits and stock value have improved
in recent months.
In other segments of the technology sector, Western Digital Corp. and EMC
Corp., two manufacturers of data storage equipment, produced rewarding total
returns. And Dell Computer Corp., a mail-order computer distributor,
capitalized on solid Christmas-season sales to gain market share at the
expense of more conventional distributors. While these securities and others
discussed in this report were viewed favorably during the period, all
portfolio holdings are subject to review and adjustment in accordance with the
fund's investment strategy and may vary in the future.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS*]
TOP INDUSTRY SECTORS*
Business services 9.1%
Retail 7.5%
Computer software 6.7%
Health-care services 5.6%
Electronics 4.5%
Footnote reads:
*Based on net assets as of 1/31/97. Sector allocations will vary over time.
* FINANCIAL AND ENVIRONMENTAL SERVICES HOLDINGS BOLSTER PERFORMANCE
In the financial services industry, a number of institutions boasted
impressive performance over the past six months. Washington Mutual Inc., a
large savings and loan association, continued its expansion during the period.
Based in the state of Washington, this company now serves markets in six
northwestern states and recently purchased American Savings, a
California-based S&L. In addition, Washington Mutual spent much of the period
restructuring its balance sheet. In doing so, the company has emphasized
consumer and commercial loans (which typically produce greater interest income
than mortgage loans), has promoted checking accounts, and has reduced
certificate of deposit issuance. As a result of these changes, the institution
has been able to enhance its interest income while decreasing the cost of
money it borrows, thereby adding to profits. Other savings institutions in the
fund's portfolio, have benefited from similar strategies.
The environmental industry was another lucrative sector for the fund. In this
sector, U.S. Filter Corp., a provider of water equipment and services, has
acquired smaller companies in related lines of business in its effort to
become a fully integrated provider serving municipal, commercial, and consumer
markets. Elsewhere in this sector, United Waste Systems Inc. and USA Waste
Services Inc., smaller providers of solid waste treatment services, continued
to grow rapidly and lent added support to the fund's performance.
The fund maintained its ample exposure to the health-care sector during the
period. Here, companies continued to benefit from consolidation and improving
products and technologies. Among the fund's holdings, Cardinal Health Inc. (a
pharmaceuticals distributor) benefited from ownership and operation of
services across the full distribution chain. And Omnicare Inc. (a company that
distributes pharmaceuticals to nursing homes) remained profitable as the elder
care industry thrived.
* SOUND PROSPECTS FOR GROWTH INVESTING
As we approach the second half of the fund's fiscal year, we will continue to
focus on securities that deliver consistent earnings growth. Our investments
in the technology and financial services industries form a sturdy base of
these types of companies. As always, we will carefully monitor the
developments taking place within the technology sector -- and all other growth
sectors -- in order to invest your fund's assets in the areas that offer the
most attractive growth potential.
TOP 10 HOLDINGS*
U.S. Filter Corp.
Water treatment equipment and services
TJX Companies, Inc.
Retail apparel
Equifax, Inc.
Transaction processing
Coca-Cola Enterprises, Inc.
Bottler and distributor of beverages
Finova Group, Inc.
Commercial lending and leasing
Omnicom Group, Inc.
Advertising
Cardinal Health, Inc.
Pharmaceutical distributor
Consolidated Stores Corp.
Specialty retailer
Estee Lauder Cos. Class A
Cosmetics
Calenergy, Inc.
Electric power resource
Footnote reads:
*These holdings represent 14.7% of the fund's net assets as of 1/31/97.
Portfolio holdings will vary over time.
We believe mid-cap stocks continue to provide excellent opportunities for
long-term growth, coupled with lower levels of volatility than those of
small-cap stocks. Over the long term, we will maintain our emphasis on mid-cap
companies with strong growth potential, sound management, and attractive
valuations. Overall, our strategy for your fund is to remain diversified
across industries to take advantage of widespread opportunities and avoid the
risks that come with concentrating holdings too heavily in any one sector.
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 1/31/97, 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 Vista Fund is designed for investors seeking capital
appreciation primarily through common stocks.
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.
TOTAL RETURN FOR PERIODS ENDED 1/31/97
Class A Class B Class M
(inception date) (6/3/68) (3/1/93) (12/8/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 20.47% 13.52% 19.94% 14.94% 20.11% 15.93%
- ------------------------------------------------------------------------------
1 year 30.18 22.73 29.28 24.28 29.71 25.13
- ------------------------------------------------------------------------------
5 years 138.94 125.27 -- -- -- --
Annual average 19.03 17.64 -- -- -- --
- ------------------------------------------------------------------------------
10 years 309.91 286.36 -- -- -- --
Annual average 15.15 14.47 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 94.41 91.41 92.36 85.74
Annual average -- -- 18.48 18.01 35.57 33.38
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/97
Standard & Poor's Consumer
Midcap 400 Index Price Index
- ------------------------------------------------------------------------------
6 months 21.45% 1.34%
- ------------------------------------------------------------------------------
1 year 21.89 3.04
- ------------------------------------------------------------------------------
5 years 95.59 15.21
Annual average 14.35 2.87
- ------------------------------------------------------------------------------
10 years 303.10 43.08
Annual average 14.96 3.65
- ------------------------------------------------------------------------------
Life of class B 78.16 11.18
Annual average 15.86 2.74
- ------------------------------------------------------------------------------
Life of class M 63.41 6.28
Annual average 25.38 2.87
- ------------------------------------------------------------------------------
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%.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 1/31/97
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income -- -- --
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term 0.606 0.606 0.606
- ------------------------------------------------------------------------------
Short-term 0.066 0.066 0.066
- ------------------------------------------------------------------------------
Total $0.672 $0.672 $0.672
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
7/31/96 $9.79 $10.39 $9.55 $9.72 $10.07
- ------------------------------------------------------------------------------
1/31/97 11.07 11.75 10.73 10.95 11.35
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/96
(most recent calendar quarter)
Class A Class B Class M
(inception date) (6/3/68) (3/1/93) (12/8/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 3.96% -1.99% 3.58% -1.27% 3.70% 0.04%
- ------------------------------------------------------------------------------
1 year 22.35 15.26 21.62 16.62 21.95 17.65
- ------------------------------------------------------------------------------
5 years 127.12 114.04 -- -- -- --
Annual average 17.83 16.44 -- -- -- --
- ------------------------------------------------------------------------------
10 years 338.41 313.18 -- -- -- --
Annual average 15.93 15.24 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 83.72 80.72 81.65 75.40
Annual average -- -- 17.16 16.66 33.42 31.18
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future performance,
and will differ for each share class. 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.
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 Midcap 400 Index is an unmanaged, market-weighted list of
400 medium-sized companies, each affecting the index in proportion to market
value. The index assumes reinvestment of all distributions and does not take
into account brokerage commissions and other costs. The fund's portfolio
contains securities that do not match those in the index, and performance of
the fund will differ. 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.
Portfolio of investments owned
January 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (92.0%) *
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Advertising (1.5%)
- ---------------------------------------------------------------------------------------------------------
951,300 Omnicom Group, Inc. $ 46,256,963
Aerospace and Defense (0.1%)
- ---------------------------------------------------------------------------------------------------------
137,500 Gulfstream Aerospace Corp. + 3,179,688
Apparel (4.0%)
- ---------------------------------------------------------------------------------------------------------
400,000 Fruit of the Loom, Inc. + 16,050,000
248,600 Gucci Group N.V. (Italy) 17,339,850
794,600 Jones Apparel Group, Inc. + 27,215,050
628,400 Just For Feet, Inc. + 18,537,800
442,300 Nine West Group, Inc. + 22,833,738
437,800 Tommy Hilfiger Corp. + 22,437,250
--------------
124,413,688
Banks (4.3%)
- ---------------------------------------------------------------------------------------------------------
524,300 Bank of Boston Corp. 37,356,375
362,200 First of America Bank Corp. 21,550,900
891,900 Northern Trust Corp. 36,567,900
524,300 State Street Boston Corp. 38,339,438
--------------
133,814,613
Broadcasting (2.0%)
- ---------------------------------------------------------------------------------------------------------
908,100 Clear Channel Communications, Inc. + 38,707,752
599,200 Evergreen Media Corp. Class A + 18,575,200
143,000 Jacor Communications, Inc. + 3,789,500
--------------
61,072,452
Building Products (1.1%)
- ---------------------------------------------------------------------------------------------------------
578,400 Sherwin Williams Co. 32,101,200
Business Services (9.1%)
- ---------------------------------------------------------------------------------------------------------
1,200,000 Accustaff, Inc. + 25,950,000
670,250 Corporate Express, Inc. + 22,620,938
540,500 DST Systems, Inc. + 17,633,813
1,530,600 Equifax, Inc. 48,213,900
755,900 Gartner Group Inc. Class A + 25,889,575
183,500 Norrell Corp. 5,115,063
517,262 Paychex, Inc. 25,087,207
702,100 Primark Corp. + 19,658,800
1,360,200 Reynolds & Reynolds Co. Class A 36,725,400
736,200 Robert Half International, Inc. + 31,656,600
1,475,600 TeleSpectrum Worldwide Inc. + 24,162,950
--------------
282,714,246
Chemicals (1.0%)
- ---------------------------------------------------------------------------------------------------------
697,300 Praxair, Inc. 32,337,288
Computer Equipment (2.4%)
- ---------------------------------------------------------------------------------------------------------
367,600 Dell Computer Corp. + 24,307,550
762,100 EMC Corp. + 28,864,538
302,700 Western Digital Corp. + 21,945,750
--------------
75,117,838
Computer Services (0.7%)
- ---------------------------------------------------------------------------------------------------------
600,000 Sterling Commerce, Inc. + 20,325,000
Computer Software (6.7%)
- ---------------------------------------------------------------------------------------------------------
555,300 BMC Software, Inc. 24,086,138
470,300 Citrix Systems, Inc. + 21,751,375
275,700 Electronics for Imaging, Inc. + 25,571,175
677,125 McAfee Associates, Inc. + 39,442,531
450,000 Medic Computer Systems, Inc. 17,437,500
502,200 Parametric Technology Corp. + 29,002,050
629,800 PeopleSoft, Inc. + 34,324,100
328,800 Viasoft, Inc. + 17,015,400
--------------
208,630,269
Cosmetics (1.3%)
- ---------------------------------------------------------------------------------------------------------
859,400 Estee Lauder Cos. Class A 41,143,775
Education (0.7%)
- ---------------------------------------------------------------------------------------------------------
691,850 Apollo Group, Inc. Class A + 23,004,013
Electrical Equipment (0.9%)
- ---------------------------------------------------------------------------------------------------------
468,700 SCI Systems, Inc. + 27,301,775
Electronics (4.5%)
- ---------------------------------------------------------------------------------------------------------
878,600 ADT Ltd. + 19,658,675
428,200 C-Cube Microsystems, Inc. + 15,415,200
561,200 Diebold, Inc. 33,110,800
454,000 Honeywell, Inc. 32,744,750
486,500 LSI Logic Corp. + 16,905,875
530,650 Microchip Technology, Inc. + 20,231,031
--------------
138,066,331
Electronic Equipment (1.5%)
- ---------------------------------------------------------------------------------------------------------
504,000 Symbol Technologies, Inc. + 27,594,000
643,200 Waters Corp. + 19,054,800
--------------
46,648,800
Environmental Control (3.3%)
- ---------------------------------------------------------------------------------------------------------
1,331,800 U.S. Filter Corp. 51,107,825
664,800 United Waste Systems, Inc. + 25,179,300
751,380 USA Waste Services, Inc. + 27,425,370
--------------
103,712,495
Financial Services (2.9%)
- ---------------------------------------------------------------------------------------------------------
567,600 CapMAC Holdings Inc. 19,582,200
648,600 Finova Group, Inc. 46,699,200
513,500 SunAmerica, Inc. 23,685,188
--------------
89,966,588
Food and Beverages (1.5%)
- ---------------------------------------------------------------------------------------------------------
836,300 Coca-Cola Enterprises, Inc. 47,564,563
Gaming (0.5%)
- ---------------------------------------------------------------------------------------------------------
924,300 International Game Technology 16,406,325
HMOs (1.3%)
- ---------------------------------------------------------------------------------------------------------
742,100 Oxford Health Plans Inc. + 40,351,688
Health Care Services (5.6%)
- ---------------------------------------------------------------------------------------------------------
675,700 Cardinal Health, Inc. 42,315,713
610,600 Genesis Health Ventures, Inc. + 19,081,250
669,100 Health Care & Retirement Corp. + 17,312,963
1,043,175 Health Management Assoc., Inc. + 28,817,709
675,700 Healthsouth Rehabilitation Corp. + 29,477,413
40,000 Multicare Companies Inc. + 720,000
1,237,800 Omnicare, Inc. 34,194,225
--------------
171,919,273
Household Products (1.8%)
- ---------------------------------------------------------------------------------------------------------
235,800 Clorox Co. 27,971,775
604,500 Tupperware Corp. 28,335,938
--------------
56,307,713
Independent Power Producer (1.9%)
- ---------------------------------------------------------------------------------------------------------
303,100 AES Corp. + 17,996,563
1,070,000 Calenergy, Inc. + 41,061,250
--------------
59,057,813
Lodging (0.7%)
- ---------------------------------------------------------------------------------------------------------
331,100 HFS, Inc. + 23,177,000
Medical Management Services (0.2%)
- ---------------------------------------------------------------------------------------------------------
150,000 Phycor, Inc. + 5,268,750
Medical Supplies and Devices (2.3%)
- ---------------------------------------------------------------------------------------------------------
527,200 IDEXX Laboratories, Inc. + 17,134,000
1,027,000 Stryker Corp. 29,783,000
578,400 U.S. Surgical Corp. 23,208,300
--------------
70,125,300
Networking Equipment (1.7%)
- ---------------------------------------------------------------------------------------------------------
460,900 ADC Telecommunications Inc. + 16,534,788
201,500 Ascend Communications, Inc. + 14,029,438
517,700 Cascade Communications Corp. + 20,578,575
--------------
51,142,801
Oil Services (0.8%)
- ---------------------------------------------------------------------------------------------------------
697,300 Dresser Industries, Inc. 23,621,038
Oil and Gas (2.6%)
- ---------------------------------------------------------------------------------------------------------
924,300 Global Marine, Inc. + 20,681,213
551,300 Halliburton Co. 39,900,338
297,300 Western Atlas, Inc. + 20,179,238
--------------
80,760,789
Pharmaceuticals and Biotechnology (4.1%)
- ---------------------------------------------------------------------------------------------------------
335,100 Biochem Pharma, Inc. + 18,807,488
573,000 Dura Pharmaceuticals, Inc. + 24,066,000
989,200 Elan Corp. PLC ADR (Ireland) + 38,084,200
751,300 Interneuron Pharmaceuticals, Inc. + 22,351,175
335,100 Quintiles Transnational Corp. + 25,006,838
--------------
128,315,701
Publishing (1.8%)
- ---------------------------------------------------------------------------------------------------------
832,400 Belo (A.H.) Corp. 31,735,250
562,100 Harcourt General, Inc. 25,435,025
--------------
57,170,275
Railroads (0.8%)
- ---------------------------------------------------------------------------------------------------------
643,200 Wisconsin Central Transportation Corp. + 23,878,800
Recreation (1.5%)
- ---------------------------------------------------------------------------------------------------------
632,400 Callaway Golf Co. 21,106,350
540,500 Harley-Davidson, Inc. 23,917,125
--------------
45,023,475
Restaurants (0.8%)
- ---------------------------------------------------------------------------------------------------------
708,100 Starbucks Corp. + 24,252,425
Retail (7.5%)
- ---------------------------------------------------------------------------------------------------------
478,900 Bed Bath & Beyond, Inc. + 13,169,750
806,300 Borders Group, Inc. + 35,981,138
1,278,375 Consolidated Stores Corp. + 42,026,578
811,200 Pier 1 Imports, Inc. 15,007,200
1,041,800 Revco D.S., Inc. + 39,067,500
1,756,700 Staples, Inc. + 36,012,350
1,243,300 TJX Cos., Inc. (The) 49,421,175
--------------
230,685,691
Savings and Loans (1.7%)
- ---------------------------------------------------------------------------------------------------------
601,115 Charter One Financial, Inc. 27,125,314
491,900 Washington Mutual, Inc. 26,716,319
--------------
53,841,633
Semiconductors (0.7%)
- ---------------------------------------------------------------------------------------------------------
792,733 Analog Devices Inc. + 22,890,165
Telecommunication Equipment (2.0%)
- ---------------------------------------------------------------------------------------------------------
502,700 Pairgain Technologies, Inc. + 20,579,281
908,100 Picturetel Corp. + 16,799,850
627,000 Tellabs, Inc. + 25,824,563
--------------
63,203,694
Telephone Services (1.2%)
- ---------------------------------------------------------------------------------------------------------
374,700 Cincinnati Bell, Inc. 23,184,563
602,400 LCI International, Inc. + 13,554,000
--------------
36,738,563
Wireless Communications (1.0%)
- ---------------------------------------------------------------------------------------------------------
977,200 Teleport Communications Group Inc. Class A + 30,415,350
--------------
Total Common Stocks (cost $2,290,584,951) $2,851,925,847
SHORT-TERM INVESTMENTS (7.0%) *
PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
25,000,000 Asset Securitization Cooperative Corp. effective yield of
5.31%, March 31, 1997 $ 24,786,125
20,000,000 Corporate Asset Funding Corp. effective yield of
5.47%, February 3, 1997 19,993,922
25,000,000 Corporate Asset Funding Corp. effective yield of
5.33%, March 6, 1997 24,877,853
25,000,000 Corporate Receivables Corp. effective yield of
5.35%, March 12, 1997 24,855,104
25,000,000 Federal Home Loan Mortgage Corp. effective yield of
5.24%, March 17, 1997 24,839,888
24,345,000 Federal National Mortgage Association effective yield of
5.3%, February 26, 1997 24,255,397
25,000,000 General Motors Acceptance Corp. effective yield of
5.62%, February 3, 1997 24,992,194
47,353,000 Interest in $667,115,000 joint repurchase agreement
dated January 31, 1997 with UBS Securities due
February 3, 1997 with respect to various U.S. Treasury
obligations -- maturity value of $47,374,940 for an
effective yield of 5.56% 47,360,313
--------------
Total Short-Term Investments (cost $215,960,796) $ 215,960,796
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $2,506,545,747) *** $3,067,886,643
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $3,100,647,771.
+ Non-income-producing security.
*** The aggregate identified cost on a tax basis is 2,506,545,660, resulting in gross unrealized
appreciation and depreciation of $613,614,064 and $52,273,081, respectively, or net unrealized
appreciation of $561,340,983.
ADR after the name of a foreign holding stands for American Depository Receipts, representing
ownership of foreign securities on deposit with a domestic custodian bank.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
January 31, 1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $2,506,545,747) (Note 1) $3,067,886,643
- ---------------------------------------------------------------------------------------------------
Cash 3,901,953
- ---------------------------------------------------------------------------------------------------
Dividends and other receivables 873,712
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 29,204,545
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 42,201,967
- ---------------------------------------------------------------------------------------------------
Other assets 25,333
- ---------------------------------------------------------------------------------------------------
Total assets 3,144,094,153
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 32,799,831
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 4,520,191
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,498,036
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 650,687
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 21,411
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 8,013
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 1,139,169
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 809,044
- ---------------------------------------------------------------------------------------------------
Total liabilities 43,446,382
- ---------------------------------------------------------------------------------------------------
Net assets $3,100,647,771
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $ 2,457,230,036
- ---------------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (6,686,394)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 88,763,233
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 561,340,896
- ---------------------------------------------------------------------------------------------------
Total - Representing net assets applicable to
capital shares outstanding $3,100,647,771
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,954,892,039 divided by 176,546,400 shares) $11.07
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $11.07)* $11.75
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($892,809,982 divided by 83,185,548 shares)** $10.73
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($59,332,460 divided by 5,420,424 shares) $10.95
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $10.95)* $11.35
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($193,613,290 divided by 17,370,332 shares) $11.15
- ---------------------------------------------------------------------------------------------------
* 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, 1997 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends $ 5,075,642
- --------------------------------------------------------------------------------------------------
Interest 3,019,957
- --------------------------------------------------------------------------------------------------
Total investment income 8,095,599
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 6,357,852
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 2,377,864
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 42,858
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 11,985
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,962,583
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 3,446,678
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 145,522
- --------------------------------------------------------------------------------------------------
Reports to shareholders 70,402
- --------------------------------------------------------------------------------------------------
Registration fees 331,320
- --------------------------------------------------------------------------------------------------
Auditing 22,366
- --------------------------------------------------------------------------------------------------
Legal 17,094
- --------------------------------------------------------------------------------------------------
Postage 370,097
- --------------------------------------------------------------------------------------------------
Other 30,157
- --------------------------------------------------------------------------------------------------
Total expenses 15,186,778
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (404,785)
- --------------------------------------------------------------------------------------------------
Net expenses 14,781,993
- --------------------------------------------------------------------------------------------------
Net investment loss (6,686,394)
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 130,383,093
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 299,695,384
- --------------------------------------------------------------------------------------------------
Net gain on investments 430,078,477
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $423,392,083
- --------------------------------------------------------------------------------------------------
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
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (6,686,394) $ (6,911,236)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 130,383,093 201,058,618
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 299,695,384 100,906
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 423,392,083 194,248,288
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A -- (84,321,794)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (28,584,576)
- ----------------------------------------------------------------------------------------------------------------------
Class M -- (657,462)
- ----------------------------------------------------------------------------------------------------------------------
Class Y -- (4,307,615)
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (99,923,321) --
- ----------------------------------------------------------------------------------------------------------------------
Class B (47,493,911) --
- ----------------------------------------------------------------------------------------------------------------------
Class M (2,889,560) --
- ----------------------------------------------------------------------------------------------------------------------
Class Y (10,719,822) --
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,043,995,351 554,119,174
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 1,306,360,820 630,496,015
- ----------------------------------------------------------------------------------------------------------------------
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 1,794,286,951 1,163,790,936
- ----------------------------------------------------------------------------------------------------------------------
End of period (including accumulated of net
investment loss of $6,686,394 and $0 respectively) $3,100,647,771 $1,794,286,951
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Six months March 28, 1995
ended Year (commencement
January 31 ended of operations) to
(Unaudited) July 31 July 31
--------------------------------------------------------------------
1997 1996 1995
--------------------------------------------------------------------
Class Y
--------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.84 $9.24 $7.83
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.01)(c) -- .01
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.99 1.46 1.40
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.98 1.46 1.41
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.67) (.86) --
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.67) (.86) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.15 $9.84 $9.24
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 20.68* 17.07 18.01*
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $193,613 $63,330 $42,717
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .40* .81 .29*
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.03)* (.01) .10*
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 61.19* 106.58 114.51
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d) $.0515
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Six months December 8, 1994
ended Year (commencement
January 31 ended of operations) to
(Unaudited) July 31 July 31
--------------------------------------------------------------------
1997 1996 1995
--------------------------------------------------------------------
Class M
--------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.72 $9.19 $6.73
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05)(c) (.08)(c) (.01)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.95 1.47 2.53
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.90 1.39 2.52
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.67) (.86) (.06)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.67) (.86) (.06)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.95 $9.72 $9.19
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 20.11* 16.37 37.63*
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $59,332 $22,232 $3,148
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .77* 1.54 1.06*
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.42)* (.82) (.31)*
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 61.19* 106.58 114.51
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d) $.0515
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Six months
ended
January 31
(Unaudited) Year ended July 31
--------------------------------------------------------------------
1997 1996 1995
--------------------------------------------------------------------
Class B
--------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.55 $9.08 $7.03
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05)(c) (.10)(c) (.03)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.90 1.43 2.14
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.85 1.33 2.11
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.67) (.86) (.06)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.67) (.86) (.06)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.73 $9.55 $9.08
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 19.94* 15.88 30.19
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $892,810 $488,085 $258,522
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .90* 1.81 1.82
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.55)* (1.03) (.51)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 61.19* 106.58 114.51
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d) $.0515
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
March 1, 1993 Six months
(commencement ended
Year ended of operations) to January 31
July 31 July 31 (Unaudited)
--------------------------------------------------------------------
1994 1993 1997
--------------------------------------------------------------------
Class B Class A
--------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $7.46 $7.12 $9.79
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .01 (.01) (.02)(c)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments .15 .40 1.97
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .16 .39 1.95
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income (.02) (.05) --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.55) -- (.67)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------
From return of capital (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.59) (.05) (.67)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.03 $7.46 $11.07
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 1.89 5.45* 20.47*
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $132,596 $20,722 $1,954,892
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.87 .72* .52*
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.53) (.07)* (.17)*
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 93.86 120.57 61.19*
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d) $.0515
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended July 31
--------------------------------------------------------------------
1996 1995 1994
--------------------------------------------------------------------
Class A
--------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.23 $7.09 $7.47
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.03) .02 .01
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.45 2.18 .21
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.42 2.20 .22
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- (.03)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.86) (.06) (.55)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.86) (.06) (.60)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.79 $9.23 $7.09
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 16.64 31.22 2.75
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,220,639 $859,403 $646,811
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.10 1.07 1.09
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.29) .26 .29
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 106.58 114.51 93.86
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended July 31
-------------------------------------------------------------------
1993 1992
-------------------------------------------------------------------
Class A
-------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $7.59 $6.97
- ------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) .07 .14
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.28 1.07
- ------------------------------------------------------------------------------------------------------
Total from investment operations 1.35 1.21
- ------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ------------------------------------------------------------------------------------------------------
From net investment income (.12) (.19)
- ------------------------------------------------------------------------------------------------------
From net realized gain on investments (1.35) (.40)
- ------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- --
- ------------------------------------------------------------------------------------------------------
From return of capital -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (1.47) (.59)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.47 $7.59
- ------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 19.63 18.46
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $439,722 $336,360
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .96 .96
- ------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) 1.08 1.92
- ------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.57 143.92
- ------------------------------------------------------------------------------------------------------
Average commission rate paid (d)
- ------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total investment return assumes dividend reinvestment
and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended
July 31, 1996 and thereafter, includes amounts paid through expense offset
and brokerage service arrangments. Prior period ratios exclude
these amounts (Note 2)
(c) Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
(d) Average commission rate paid on security trades is required for fiscal periods
beginning on or after September 1, 1995.
</TABLE>
Notes to financial statements
January 31, 1997 (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 securities for short-term profits.
The fund offers class A, class B, class M and class Y shares. Class A shares
are sold with a maximum front-end sales charge of 5.75%. Class B shares, which
convert to class A shares after approximately eight years, do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than class A
shares, and are subject to a contingent deferred sales charge, if those shares
are redeemed within six years of purchase. Class M shares are sold with a
maximum front-end sales charge of 3.50% and pay an ongoing distribution fee
that is higher than class A shares but lower than class B shares. Class Y
shares, which are sold at net asset value, are generally subject to the same
expenses as class A shares, class B shares and class M shares, but do not bear
a distribution fee. Class Y shares are sold to defined contribution plans that
initially invest at least $250 million in a combination of Putnam funds.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if
that fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies 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. Securities
quoted in foreign currencies are translated into U.S. dollars at the current
exchange rate. Short-term investments having remaining maturities of 60 days
or less are stated at amortized cost, which approximates market value, 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 and certain other accounts managed by Putnam Investment
Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc.. 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. 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. 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 nor 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. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations.
Note 2
Management fee, administrative services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund. Such
fee is based on the following annual rates: 0.65% of the first $500 million of
average net assets, 0.55% of the next $500 million, 0.50% of the next $500
million, 0.45% of the next $5 billion, 0.425% of the next $5 billion, 0.405%
of the next $5 billion, 0.39% of the next $5 billion and 0.38% of any excess
over $21.5 billion. Prior to November 20, 1996, any amount over $1.5 billion
was based on a rate of 0.45%.
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, 1997, fund expenses were reduced by
$404,785 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the Statement
of operations exclude these credits. The fund could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if it had not entered into such arrangements.
Trustees of the fund receive an annual Trustees fee of $2,750 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 certain Putnam funds until distribution in accordance with
the Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of Trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B 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 providedit 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, 1997, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $1,220,137 and $53,521 from the
sale of class A and class M shares, respectively and $376,288 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 year ended January 31, 1997, Putnam Mutual Funds Corp., acting as
underwriter received $19,863 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended January 31, 1997, purchases and sales of
investment securities other than short-term investments aggregated
$1,762,133,758 and $1,050,693,288, 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, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 76,301,822 $882,703,949
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 9,085,632 93,305,881
- ------------------------------------------------------------
85,387,454 976,009,830
Shares
repurchased (33,473,084) (421,659,876)
- ------------------------------------------------------------
Net increase 51,914,370 $554,349,954
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 58,619,707 $576,076,854
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 9,126,187 78,485,159
- ------------------------------------------------------------
67,745,894 654,562,013
Shares
repurchased (36,229,166) (352,601,385)
- ------------------------------------------------------------
Net increase 31,516,728 $301,960,628
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 34,629,201 $365,973,659
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,398,892 43,813,368
- ------------------------------------------------------------
39,028,093 409,787,027
Shares
repurchased (6,971,200) (73,644,564)
- ------------------------------------------------------------
Net increase 32,056,893 $336,142,463
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 29,966,996 $288,819,739
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,127,846 26,336,480
- ------------------------------------------------------------
33,094,842 315,156,219
Shares
repurchased (10,440,472) (99,513,466)
- ------------------------------------------------------------
Net increase 22,654,370 $215,642,753
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 4,094,410 $44,330,880
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 271,721 2,760,728
- ------------------------------------------------------------
4,366,131 47,091,608
Shares
repurchased (1,234,099) (13,310,361)
- ------------------------------------------------------------
Net increase 3,132,032 $33,781,247
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 2,967,129 $29,187,299
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 74,406 636,171
- ------------------------------------------------------------
3,041,535 29,823,470
Shares
repurchased (1,095,748) (10,746,643)
- ------------------------------------------------------------
Net increase 1,945,787 $19,076,827
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 12,156,682 $133,695,702
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,037,765 10,719,822
- ------------------------------------------------------------
13,194,447 144,415,524
Shares
repurchased (2,259,591) (24,693,837)
- ------------------------------------------------------------
Net increase 10,934,856 $119,721,687
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 3,075,803 $30,261,120
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 499,144 4,307,615
- ------------------------------------------------------------
3,574,947 34,568,735
Shares
repurchased (1,761,063) (17,129,769)
- ------------------------------------------------------------
Net increase 1,813,884 $17,438,966
- ------------------------------------------------------------
Note 5
Transactions with Certain Companies
Transactions during the year with companies in which the fund owns
at least 5% of the voting securities were as follows:
Purhcase Sales Dividend Market
Affilliate cost cost Income Value
- ---------------------------------------------------------------
TeleSpectrum
Worldwide Inc. $23,953,781 $-- $-- $24,162,950
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PUTNAM GROWTH FUNDS
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PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
LIFESTAGESM FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS **
Putnam money market funds: ++
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts [2 DBL DAGGERS]
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Formerly OTC Emerging Growth Fund
[SECTION MARK] Not available in all states.
** Relative to above.
++ An investment in a money market fund is neither insured
nor guaranteed by the U.S. government. These funds are
managed to maintain a price of $1.00 per share,
although there is no assurance that this price will be
maintained in the future.
[2 DBL. DAGGERS] Not offered by Putnam Investments. Certificates of deposit
offer a fixed rate of return and may be insured up to
certain limits by federal/state agencies. Savings
accounts may also be insured up to certain limits. Please
call your financial advisor or Putnam at 1-800-225-1581
to obtain a prospectus for any Putnam fund. It contains
more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
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
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Jennifer K. Silver
Vice President and Fund Manager
C. Kim Goodwin
Vice President and Fund Manager
Anthony C. Santosus
Vice President and Fund Manager
David J. Santos
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
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 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. You can also learn more at Putnam
Investments' website: http://www.putnaminv.com.
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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Bulk Rate
U.S. Postage
PAID
Putnam
Investments
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31264-006/317/515 3/97
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
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Putnam Vista Fund
Supplement to Semiannual Report dated January 31, 1997
The following information has been prepared to provide class Y
shareholders with a performance overview specific to their holdings.
Class Y shares are offered exclusively to defined contribution plans
investing $250 million or more in one or more of Putnam's funds or
private accounts. Performance of class Y shares, which incur neither a
front-end load, distribution fee, nor contingent deferred sales charge,
will differ from performance of class A, B, and M shares, which are
discussed more extensively in the semiannual report.
SEMIANNUAL RESULTS AT A GLANCE
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Total return: NAV
Six months ended 1/31/97 20.68%
One year ended 1/31/97 30.79
Life of class (since 3/28/95) 66.73
Annual average 31.83
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Share value: NAV
7/31/96 $ 9.84
1/31/97 11.15
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Distributions: No. Income Capital gains Total
Long-term Short-term
1 -- $0.606 $0.066 $0.672
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Please note that past performance does not indicate future results.
Investment return and principal value will fluctuate so your shares,
when redeemed, may be worth more or less than their original cost. See
full report for information on comparative benchmarks. If you have
questions, please consult your fund prospectus or call Putnam toll free
at 1-800-752-9894.
