Putnam
Vista
Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
7-31-00
[SCALE LOGO OMITTED]
FROM THE TRUSTEES
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM, III]
Dear Shareholder:
It is a pleasure to greet you in our new roles as Chairman of the
Trustees and President of the Funds. As you know, both of us have been
members of the Board of Trustees for a number of years -- years during
which the global securities markets, the mutual fund industry, and
Putnam itself have experienced tremendous growth and change.
As we look to the future, we are certain that the changes will be
breathtaking in their scope. What will not change is the Trustees'
dedication to serving the best interests of our shareholders.
We welcome the challenges that lie ahead and are confident that Putnam
and your Board will continue to face those challenges successfully as
they have for more than 60 years. We look forward to helping you meet
your financial objectives for many years to come.
Respectfully yours,
/S/ JOHN A. HILL /S/GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
September 20, 2000
REPORT FROM FUND MANAGEMENT
Eric M. Wetlaufer
Anthony C. Santosus
Dana F. Clark
Margery C. Parker
The 12 months ended July 31, 2000, was a good year to be a midsize
growth company. Investors' "big-is-beautiful" mentality, which had
pushed the prices of large-company stocks dramatically higher in the
past five years, finally gave way to a much broader perspective. With
growth at any size in vogue, Putnam Vista Fund's portfolio of midsize
companies achieved performance gains in excess of 50% at net asset
value. Many of the fund's most profitable companies rode the high-tech
boom, of course. However, several non-tech companies in the health-care,
utility, and oil service sectors also made notable contributions to
performance.
Total return for 12 months ended 7/31/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
----------------------------------------------------------------------
53.19% 44.40% 51.89% 46.89% 52.03% 51.03% 52.26% 46.98%
----------------------------------------------------------------------
Past performance is not indicative of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 6.
* MIDSIZE GROWTH STOCKS RALLY
For the past several years, midsize companies, along with other
out-of-favor stocks, had been sidelined as their larger brethren
achieved dramatic year-over-year increases. That all changed last
December, when mid-cap stocks surged past the Standard & Poor's 500
Index, a barometer of large-company performance, for the first time
since 1993. In fact, the Russell Midcap Growth Index rose 51.3% for
calendar 1999, surpassing the S&P 500's return of 21.1%.
With the Y2K hurdle behind, the rally in midsize companies continued
into 2000. Many Wall Street observers credit investors' concerns about
the lofty valuations of larger stocks for the stock market's broadening
appeal. Economic instability in Russia, Asia, and Latin America in
recent years had sent investors scurrying for cover in a narrow range of
well established large-cap companies and drove up prices. Thus, when
concerns about an economic slowdown and a series of earnings
disappointments threatened the fate of large-company stocks in early
2000, the relatively lower valuations of midsize stocks helped cushion
this segment of the stock market.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Software 16.5%
Semiconductor 10.2%
Communications
equipment 8.6%
Biotechnology 8.2%
Technology
services 6.4%
Footnote reads:
*Based on net assets as of 7/31/00. Holdings will vary over time.
"Strong investor confidence has led to a resurgence of interest in
midsize companies."
-- Eric M. Wetlaufer, manager Putnam Vista Fund
However, by mid March, the Federal Reserve Board's anti-inflation
crusade was finally taking its toll. Any company sensitive to higher
interest rates, including those in the high-flying technology sector,
buckled regardless of size. While the spring correction and ensuing
market volatility have dampened investor confidence, the market made a
comeback during the remaining months of the reporting period,
demonstrating considerable breadth. Market valuations of growth stocks
are improving, and midsize companies continue to report strong corporate
profits.
* TECHNOLOGY REMAINS ATTRACTIVE DESPITE VOLATILITY
There is no disputing the role of technology in our daily lives as well
as its part in any sound investment strategy. The ground swell of
innovation is spurring rapid change in every sector of the economy and
having a profound impact on inflation and productivity. High-tech
companies are also propelling the growth of many information-dependent
industries, including finance, media and retail.
Morningstar awarded Putnam Vista Fund's class A shares its highest
rating of 5 stars for its overall performance as of July 31, 2000. This
rating put the fund in the top 10% of the 3,776 domestic equity funds
rated.
Past performance is not indicative of future results. Morningstar
ratings reflect risk-adjusted performance through 7/31/00 and are
subject to change every month. Morningstar ratings are calculated from a
fund's 3-, 5-, and 10-year returns (with fee adjustments) in excess of
90-day Treasury bill returns. For 3-year, 5-year, and 10-year
performance, the fund's class A shares received 4, 4 and 5 stars,
respectively, and 3,776, 2,348, and 786 domestic equity funds were
rated, respectively. The top 10% of funds in an investment category
receive 5 stars. The next 22.5% receive 4 stars. The fund was not rated
over longer periods. Rating of other share classes will vary.
While it is true that technology stocks, by their very nature, can
experience wide price swings, we believe their potential long-term
benefits far outweigh any short-term volatility. The software industry
is a particularly lucrative area for your fund. Rational Software,
Siebel Systems and Macromedia, Inc., three prominent fund holdings, are
providing corporate America with new state-of-the-art applications.
While these holdings, along with others discussed in this report, were
viewed favorably at the end of the period, all are subject to review and
adjustment in accordance with the fund's investment strategy, and may
vary in the future.
* STRONG PERFORMANCE ALSO FOUND OUTSIDE TECH SECTOR
Technology may represent the backbone of your portfolio; however,
several other sectors played a significant role in the fund's
performance. In the health-care field, we are emphasizing medical
technology and biotechnology companies. PE Biosystems Group is a leading
provider of equipment used in DNA sequencing and genetic analysis.
Medimmune produces a drug that prevents a respiratory virus that leads
to pneumonia and bronchitis in premature babies. The fund is also
invested in companies selling specialty health-care products, such as
Allergan, a leading manufacture of eye and skin-care products.
Given the stock market's increased volatility, we have located several
niche companies with defensive qualities. Such companies are less
affected by the ups and downs of the economy because their products and
services are constantly in demand. Examples include Calpine Corp., an
independent electric power producer that is setting up plants nationwide
to meet burgeoning demand. In the energy sector, BJ Services, a new
holding, is improving the efficiency and flow from wells during the
drilling process. This company is also benefiting from higher oil
prices, which are casting a favorable glow on any business involved with
the production of oil.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Applied Micro Circuits Corp.
Semiconductor
Rational Software Corp.
Software
Allergan, Inc.
Medical technology
Brocade Communications Systems
Communications equipment
IVAX Corp.
Pharmaceuticals
Medimmune, Inc.
Biotechnology
PE Corp.-PE Biosystems Group
Medical technology
Comverse Technology, Inc.
Communications equipment
Redback Networks, Inc.
Communications equipment
Symbol Technologies, Inc.
Technology services
Footnote reads:
These holdings represent 20.3% of the fund's net assets as of 7/31/00.
Portfolio holdings will vary over time.
Telecommunications companies are striving to make connecting to the
World Wide Web faster and more reliable with broadband networks for
high-speed transmission. Several of the fund's holdings are well
positioned to benefit from this burgeoning marketplace. McLeodUSA, Inc.,
has a strong foothold in the Midwest, where the regional Bells are not
prepared to compete. Dynamic management and rising market share bode
well for this company. Voicestream Wireless utilizes GSM technology in
the delivery of its cellular technology, which is compatible with
European wireless. Just prior to the close of the period, German-based
Deutsche Telecom offered to acquire this company. Should shareholders
approve the merger, as most analysts expect they will, the fund may
realize a nice profit on a sale of the stock when the transaction is
complete.
Rising interest rates and the threat of slower growth overshadowed
several sectors of the economy, most notably the financial and retail
sectors. We have eased these pressures on the fund by underweighting
financial stocks and keeping retail stocks roughly in line with
weightings of the benchmark. In the financial sector, we have focused on
asset managers, which are currently faring better than banks. Brokerage
firm Legg Mason is an attractive acquisition candidate for larger
financial services companies, especially European insurance and banking
institutions looking for a foray into U.S. financial markets. In the
retail sector, Tiffany & Co. and BJ's Wholesale Club performed well, but
we were disappointed by Circuit City Stores, which has been hurt by
aggressive pricing of appliances by competitors. We sold this holding by
the end of the period.
* SPRING CORRECTION RESTORES BALANCE TO MARKETS
Debate over the future course of corporate earnings, interest rates, and
the November elections is likely to generate uncertainty for the
foreseeable future. While this may translate into increased volatility
over the short term, we remain quite upbeat. In addition to the
attractive buying opportunities that uncertainty creates, the spring
correction produced a tangible shift in investor psychology and a
renewed appreciation for asset allocation. This more diversified
approach bodes well for the midsize companies in your fund, especially
those offering differentiated products and services that can command
higher prices.
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 7/31/00, there is no guarantee the fund will
continue to hold these securities in the future. The fund invests all or
a portion of its assets in small to midsize companies. Such investments
increase the risk of greater price fluctuations.
PERFORMANCE SUMMARY
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
Vista Fund is designed for investors seeking capital appreciation
primarily through common stocks.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 7/31/00
Class A Class B Class C Class M
(inception dates) (6/3/68) (3/1/93) (7/26/99) (12/8/94)
NAV POP NAV CDSC NAV CDSC NAV POP
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 53.19% 44.40% 51.89% 46.89% 52.03% 51.03% 52.26% 46.98%
----------------------------------------------------------------------------------
5 years 227.49 208.76 215.42 213.42 215.43 215.43 219.66 208.59
Annual average 26.78 25.29 25.83 25.67 25.83 25.83 26.16 25.28
----------------------------------------------------------------------------------
10 years 615.03 573.45 561.79 561.79 563.16 563.16 578.48 554.97
Annual average 21.74 21.01 20.80 20.80 20.83 20.83 21.10 20.68
----------------------------------------------------------------------------------
Annual average
(Life of fund) 12.88 12.67 11.84 11.84 12.03 12.03 12.12 11.99
----------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/00
Russell Midcap Consumer
Growth Index* price index
------------------------------------------------------------
1 year 43.76% 3.60%
------------------------------------------------------------
5 years 183.94 13.10
Annual average 23.20 2.49
------------------------------------------------------------
10 years 487.78 32.44
Annual average 19.37 2.85
------------------------------------------------------------
Annual average
(Life of fund) --* 5.13
------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Recent returns were achieved
during market conditions that may not be sustainable. Returns for class
A and class M shares reflect the current maximum initial sales charges
of 5.75% and 3.50%, respectively. Class B share returns for the 1-year,
5-year, 10-year and life-of-fund periods reflect the applicable
contingent deferred sales charge (CDSC), which is 5% in the first year,
declines to 1% in the sixth year, and is eliminated thereafter. Returns
shown for class B and class M shares for periods prior to their
inception are derived from the historical performance of class A shares,
adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and in the case of class B and class
M shares the higher operating expenses applicable to such shares. For
class C shares, returns for periods prior to their inception are derived
from the historical performance of class A shares, adjusted to reflect
both the CDSC currently applicable to class C shares, which is 1% for
the first year and is eliminated thereafter, and the higher operating
expenses applicable to class C shares. All returns assume reinvestment
of distributions at NAV. Investment return and principal value will
fluctuate so that an investor's shares when redeemed may be worth more
or less than their original cost.
*This index began operations on 12/31/85.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 7/31/90
Fund's class A Russell Midcap Consumer price
Date shares at POP Growth Index index
7/31/90 9,425 10,000 10,000
7/31/91 10,762 11,908 10,445
7/31/92 12,749 13,285 10,775
7/31/93 15,252 15,043 11,074
7/31/94 15,672 15,831 11,380
7/31/95 20,564 20,701 11,710
7/31/96 23,985 22,201 12,055
7/31/97 32,681 31,013 12,316
7/31/98 38,203 33,598 12,523
7/31/99 43,963 40,886 12,784
7/31/00 $67,345 $58,778 $13,244
Footnote reads:
Past performance is no assurance of future results. At the end of the
same time period, a $10,000 investment in the fund's class B and class C
shares would have been valued at $66,179 and $66,316, respectively, and
no contingent deferred sales charges would apply; a $10,000 investment
in the fund's class M shares would have been valued at $67,848 ($65,497
at public offering price).
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 7/31/00
Class A Class B Class C Class M
------------------------------------------------------------------------------
Distributions (number) 1 1 1 1
------------------------------------------------------------------------------
Income -- -- -- --
------------------------------------------------------------------------------
Capital gains
Long-term $1.8350 $1.8350 $1.8350 $1.8350
------------------------------------------------------------------------------
Short-term 0.4550 0.4550 0.4550 0.4550
------------------------------------------------------------------------------
Total $2.2900 $2.2900 $2.2900 $2.2900
------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
------------------------------------------------------------------------------
7/31/99 $14.30 $15.17 $13.51 $14.30 $13.92 $14.42
------------------------------------------------------------------------------
7/31/00 19.10 20.27 17.73 18.95 18.40 19.07
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 6/30/00 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (6/3/68) (3/1/93) (7/26/99) (12/8/94)
NAV POP NAV CDSC NAV CDSC NAV POP
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 58.69% 49.54% 57.48% 52.48% 57.47% 56.47% 57.85% 52.31%
-------------------------------------------------------------------------------------
5 years 277.37 255.69 263.45 261.45 263.31 263.31 268.34 255.38
Annual average 30.42 28.89 29.45 29.30 29.44 29.44 29.79 28.87
-------------------------------------------------------------------------------------
10 years 654.46 610.98 598.54 598.54 599.56 599.56 615.89 590.39
Annual average 22.40 21.67 21.46 21.46 21.47 21.47 21.75 21.31
-------------------------------------------------------------------------------------
Annual average
(Life of fund) 13.14 12.93 12.09 12.09 12.29 12.29 12.38 12.25
-------------------------------------------------------------------------------------
</TABLE>
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. 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. See first
page of performance section for performance calculation method.
TERMS AND DEFINITIONS
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.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
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 5.75% maximum 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 or C shares and assumes redemption at the
end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one
year after purchase.
COMPARATIVE BENCHMARKS
Russell Midcap Growth Index* measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth
Index.*
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities
in the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss
for the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that
remain in the portfolio -- any change in unrealized gains or losses over
the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders
Putnam Vista Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Vista Fund, including the fund's portfolio, as of July 31, 2000,
and the related statement of operations, statement of changes in net
assets and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The
statement of changes in net assets for the year ended July 31, 1999, and
the financial highlights for each of the years in the four-year period
ended July 31, 1999, were audited by other auditors whose report dated
September 14, 1999, expressed an unqualified opinion on that financial
statement and those financial highlights.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform our audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of July 31, 2000, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam Vista Fund as of July 31, 2000, the results
of its operations, changes in its net assets and financial highlights
for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
KPMG LLP
Boston, Massachusetts
September 1, 2000
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
July 31, 2000
COMMON STOCKS (99.3%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Advertising and Marketing Services (1.6%)
-------------------------------------------------------------------------------------------------------------------
2,806,300 Interpublic Group Cos., Inc. $ 112,427,394
787,000 Omnicom Group, Inc. 66,895,000
----------------
179,322,394
Banking (1.0%)
-------------------------------------------------------------------------------------------------------------------
121,212 M & T Bank Corp. 57,265,094
1,258,800 Zions Bancorp 55,072,500
----------------
112,337,594
Biotechnology (8.2%)
-------------------------------------------------------------------------------------------------------------------
788,700 Abgenix, Inc. (NON) 39,533,588
798,467 Diversa Corp. (NON) 28,744,812
992,400 Gilead Sciences, Inc. (NON) 73,561,650
524,500 IDEC Pharmaceuticals Corp. (NON) 64,415,156
2,739,600 Immunex Corp. (NON) 138,863,475
399,200 Medarex, Inc. (NON) 29,091,700
3,813,800 Medimmune, Inc. (NON) 226,921,100
861,200 Millennium Pharmaceuticals, Inc. (NON) 82,890,500
495,000 Protein Design Labs, Inc. (NON) 59,987,813
1,471,400 Sepracor, Inc. (NON) 155,600,550
----------------
899,610,344
Broadcasting (2.9%)
-------------------------------------------------------------------------------------------------------------------
3,448,124 Radio One, Inc. Class D (NON) 65,083,341
1,545,412 Radio One, Inc. Class A (NON) (AFF) 36,027,417
3,953,577 Spanish Broadcasting System, Inc. Class A (NON) (AFF) 43,983,544
1,403,000 Univision Communications, Inc. Class A (NON) 174,322,750
----------------
319,417,052
Cable Television (0.5%)
-------------------------------------------------------------------------------------------------------------------
2,124,000 General Motors Corp. Class H (NON) 54,958,500
Chemicals (1.7%)
-------------------------------------------------------------------------------------------------------------------
2,114,914 Ecolab, Inc. 75,740,358
2,771,800 Praxair, Inc. 109,659,338
----------------
185,399,696
Commercial and Consumer Services (1.2%)
-------------------------------------------------------------------------------------------------------------------
2,144,400 Cintas Corp. 90,466,875
524,700 Macrovision Corp. (NON) 39,614,850
----------------
130,081,725
Communications Equipment (8.6%)
-------------------------------------------------------------------------------------------------------------------
2,911,400 ADC Telecommunications, Inc. (NON) 122,096,838
1,339,300 Brocade Communications Systems (NON) 239,232,463
2,321,220 Comverse Technology, Inc. (NON) 203,687,055
34,900 Crossroads Systems, Inc. (NON) 159,231
3,020,900 Finisar Corp. (NON) 80,242,656
832,700 Foundry Networks, Inc. (NON) 68,125,269
409,200 Polycom, Inc. (NON) 38,816,456
1,505,700 Redback Networks, Inc. (NON) 195,741,000
----------------
948,100,968
Computers (0.8%)
-------------------------------------------------------------------------------------------------------------------
1,711,000 Apple Computer, Inc. (NON) 86,940,188
Consumer Finance (1.0%)
-------------------------------------------------------------------------------------------------------------------
1,979,000 Capital One Financial Corp. 116,018,875
Consumer Goods (0.9%)
-------------------------------------------------------------------------------------------------------------------
2,247,100 Estee Lauder Cos. Class A 98,872,400
Electric Utilities (2.0%)
-------------------------------------------------------------------------------------------------------------------
2,098,800 Calpine Corp. (NON) 149,539,500
1,538,100 CMS Energy Corp. 39,317,681
604,400 Florida Progress Corp. 29,615,600
----------------
218,472,781
Electronics (5.7%)
-------------------------------------------------------------------------------------------------------------------
905,000 Bookham Technology PLC (United Kingdom) (NON) 56,788,750
1,779,400 Jabil Circuit, Inc. (NON) 89,081,213
497,640 JDS Uniphase Corp. (NON) 58,783,725
1,996,100 PerkinElmer, Inc. 127,625,644
1,973,400 Sanmina Corp. (NON) 183,279,525
2,498,000 SCI Systems, Inc. (NON) 114,595,750
----------------
630,154,607
Energy (4.2%)
-------------------------------------------------------------------------------------------------------------------
1,243,300 BJ Services Co. (NON) 72,577,638
1,254,700 Cooper Cameron Corp. (NON) 81,084,988
4,231,800 Global Marine, Inc. (NON) 119,812,838
1,049,400 Smith International, Inc. (NON) 74,900,925
2,429,600 Transocean Sedco Forex, Inc. 120,265,200
----------------
468,641,589
Household Furniture and Appliances (0.1%)
-------------------------------------------------------------------------------------------------------------------
781,900 Furniture Brands International, Inc. (NON) 11,581,894
Investment Banking/Brokerage (0.7%)
-------------------------------------------------------------------------------------------------------------------
1,442,700 Legg Mason, Inc. 75,020,400
Leisure Time Products (1.2%)
-------------------------------------------------------------------------------------------------------------------
2,828,800 Harley-Davidson, Inc. 126,942,400
Manufacturing (0.6%)
-------------------------------------------------------------------------------------------------------------------
1,197,700 Danaher Corp. 61,007,844
Medical Technology (4.4%)
-------------------------------------------------------------------------------------------------------------------
3,623,100 Allergan, Inc. 242,521,256
2,406,800 PE Corp.-PE Biosystems Group 209,842,875
250,900 Waters Corp. (NON) 29,763,013
----------------
482,127,144
Oil & Gas (1.4%)
-------------------------------------------------------------------------------------------------------------------
1,631,100 Devon Energy Corp. 74,622,825
1,357,400 Murphy Oil Corp. 81,783,350
----------------
156,406,175
Pharmaceuticals (5.7%)
-------------------------------------------------------------------------------------------------------------------
818,400 Andrx Corporation (NON) 63,886,350
1,642,550 Forest Laboratories, Inc. (NON) 175,752,850
809,900 Inhale Therapeutic Systems (NON) 65,753,756
1,875,345 IDEXX Laboratories, Inc. (NON) (AFF) 45,477,116
4,625,350 IVAX Corp. (NON) 227,798,488
338,100 United Therapeutics Corp.
(acquired 7/13/00, cost $37,191,000) (RES) (NON) 29,820,420
206,600 United Therapeutics Corp. (NON) 20,246,800
----------------
628,735,780
Publishing (0.2%)
-------------------------------------------------------------------------------------------------------------------
924,000 PRIMEDIA, Inc. (NON) 18,826,500
Restaurants (1.6%)
-------------------------------------------------------------------------------------------------------------------
3,399,100 Darden Restaurants, Inc. 55,447,819
3,079,700 Starbucks Corp. (NON) 115,488,750
----------------
170,936,569
Retail (4.6%)
-------------------------------------------------------------------------------------------------------------------
3,262,300 BJ's Wholesale Club, Inc. (NON) 97,665,106
5,817,400 Family Dollar Stores, Inc. 98,168,625
2,850,000 Linens 'N Things, Inc. (NON) (AFF) 85,321,875
1,869,814 RadioShack Corp. 105,410,764
3,627,200 Tiffany & Co. 124,231,600
----------------
510,797,970
Semiconductor (10.2%)
-------------------------------------------------------------------------------------------------------------------
699,600 Alpha Industries, Inc. (NON) 23,830,125
832,700 Altera Corp. (NON) 81,760,731
1,733,800 Applied Micro Circuits Corp. (NON) 258,769,650
3,228,000 Atmel Corp. (NON) 96,638,250
722,100 GlobeSpan, Inc. (NON) 81,552,169
1,748,100 LSI Logic Corp. (NON) 59,216,888
1,608,400 Maxim Integrated Products, Inc. (NON) 106,254,925
924,000 RF Micro Devices, Inc. (NON) 69,646,500
902,300 SanDisk Corp. (NON) 57,521,625
2,155,900 Sawtek, Inc. (NON) (AFF) 114,801,675
2,053,100 Vitesse Semiconductor Corp. (NON) 122,416,088
638,700 Xilinx, Inc. (NON) 47,942,419
----------------
1,120,351,045
Semiconductor Production Equipment (0.8%)
-------------------------------------------------------------------------------------------------------------------
2,201,400 LAM Research Corp. (NON) 64,390,950
1,097,000 LTX Corp. (NON) 24,134,000
----------------
88,524,950
Software (16.5%)
-------------------------------------------------------------------------------------------------------------------
494,200 Akamai Technologies, Inc. (NON) 38,972,303
710,900 Ariba, Inc. (NON) 82,419,969
2,144,400 BEA Systems, Inc. (NON) 92,343,225
2,532,200 BroadVision, Inc. (NON) 91,633,988
772,500 I2 Technologies, Inc. (NON) 100,231,875
570,300 Internet Security Systems, Inc. (NON) 42,130,913
615,900 Inktomi Corp. (NON) 65,901,300
2,201,400 Intuit, Inc. (NON) 74,847,600
730,000 Macromedia, Inc. (NON) 55,845,000
730,000 Mercury Interactive Corp. (NON) 72,463,906
422,000 Micromuse, Inc. (NON) 54,747,906
4,768,000 Peregrine Systems, Inc. (NON) 118,902,000
596,100 Phone.com, Inc. (NON) 47,613,488
2,349,700 Portal Software, Inc. (NON) 118,329,423
981,000 Quest Software, Inc. (NON) 46,352,250
2,383,900 Rational Software Corp. (NON) 242,561,825
593,200 Siebel Systems, Inc. (NON) 86,014,000
1,113,200 TIBCO Software, Inc. (NON) 114,659,600
387,800 VeriSign, Inc. (NON) 61,539,013
735,748 VERITAS Software Corp. (NON) 75,000,312
3,912,200 Vignette Corp. (NON) 132,525,775
----------------
1,815,035,671
Technology Services (6.4%)
-------------------------------------------------------------------------------------------------------------------
2,608,500 Convergys Corp. (NON) 117,545,532
798,500 Diamond Technology Partners, Inc. (NON) 71,116,406
3,056,925 Fiserv, Inc. (NON) 170,614,627
2,201,400 InfoSpace.com, Inc. (NON) 74,297,250
843,300 Scient Corp. (NON) 39,318,863
4,719,400 Symbol Technologies, Inc. 188,186,075
2,248,200 Ziff-Davis, Inc. (NON) 38,500,425
----------------
699,579,178
Telecommunications (4.7%)
-------------------------------------------------------------------------------------------------------------------
1,819,350 Allegiance Telecom, Inc. (NON) 101,087,624
2,908,700 Crown Castle International Corp. (NON) 98,895,799
6,034,054 McLeodUSA, Inc. Class A (NON) 102,201,790
1,240,425 NTL, Inc. (NON) 55,896,652
1,003,700 Telephone and Data Systems, Inc. 111,787,088
341,362 VoiceStream Wireless Corp. (NON) 43,779,677
----------------
513,648,630
----------------
Total Common Stocks (cost $9,085,600,446) $ 10,927,850,863
COMMERCIAL PAPER (2.8%) (a)
PRINCIPAL AMOUNT VALUE
-------------------------------------------------------------------------------------------------------------------
$58,800,000 Ciesco L.P., effective yield of 6 1/2%, August 11, 2000 $ 58,693,833
50,000,000 Corporate Asset Funding Co. Inc., effective yield of 6.53%,
August 18, 2000 49,845,820
50,000,000 Delaware Funding Corp, effective yield of 6.51%,
August 25, 2000 49,783,000
57,332,000 Federal Home Loan Mortgage Association, effective yield
of 6.43%, August 15, 2000 57,188,638
41,000,000 Federal Home Loan Mortgage Association, effective yield
of 6.40%, August 22, 2000 40,836,700
50,000,000 National Australia Funding (DE) Inc., effective yield of 6.51%,
August 4, 2000 49,972,875
----------------
Total Commercial Paper (cost $306,323,866) $ 306,320,866
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $9,391,924,312) (b) $ 11,234,171,729
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $11,005,337,257.
(b) The aggregate identified cost on a tax basis is $9,406,914,826
resulting in gross unrealized appreciation and depreciation of
$2,735,407,566 and $908,150,663, respectively, or net unrealized
appreciation of $1,827,256,903.
(NON) Non-income-producing security.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at July 31, 2000 was
$29,820,420 or 0.3% of net assets.
(AFF) Affiliated Companies (Note 5).
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
July 31, 2000
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $9,391,924,312) (Note 1) $11,234,171,729
-------------------------------------------------------------------------------------------
Cash 19,156,558
-------------------------------------------------------------------------------------------
Dividends, interest, and other receivables 319,731
-------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 42,194,179
-------------------------------------------------------------------------------------------
Receivable for securities sold 97,944,016
-------------------------------------------------------------------------------------------
Receivable for variation margin 21,653
-------------------------------------------------------------------------------------------
Total assets 11,393,807,866
Liabilities
-------------------------------------------------------------------------------------------
Payable for securities purchased 355,649,386
-------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 13,368,653
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 12,365,515
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 1,686,737
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 61,859
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,903
-------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 4,349,676
-------------------------------------------------------------------------------------------
Other accrued expenses 985,880
-------------------------------------------------------------------------------------------
Total liabilities 388,470,609
-------------------------------------------------------------------------------------------
Net assets $11,005,337,257
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $ 6,887,138,377
-------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 2,275,951,463
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,842,247,417
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to capital shares outstanding $11,005,337,257
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($6,763,531,768 divided by 354,165,251 shares) $19.10
-------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $19.10)* $20.27
-------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($2,880,568,045 divided by 162,436,036 shares)** $17.73
-------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($91,913,562 divided by 4,851,091 shares)** $18.95
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($241,431,833 divided by 13,119,205 shares) $18.40
-------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $18.40)* $19.07
-------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($1,027,892,049 divided by 52,776,446 shares) $19.48
-------------------------------------------------------------------------------------------
* 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
Year ended July 31, 2000
<S> <C>
Investment income:
-------------------------------------------------------------------------------------------
Dividends (including dividend income of $151,380 from
investments in affiliated issuers) (Note 5) $ 16,654,899
-------------------------------------------------------------------------------------------
Interest 13,466,605
-------------------------------------------------------------------------------------------
Total investment income 30,121,504
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 41,028,455
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 11,527,719
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 76,679
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 34,880
-------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 13,554,338
-------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 24,291,162
-------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 328,592
-------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 1,540,006
-------------------------------------------------------------------------------------------
Other 2,732,146
-------------------------------------------------------------------------------------------
Total expenses 95,113,977
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (2,010,028)
-------------------------------------------------------------------------------------------
Net expenses 93,103,949
-------------------------------------------------------------------------------------------
Net investment loss (62,982,445)
-------------------------------------------------------------------------------------------
Net realized gain on investments (including realized loss of
$145,184,783 on sales of investments in affiliated issuers)
(Notes 1, 3 and 5) 2,402,792,107
-------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 9,478,805
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 872,985,202
-------------------------------------------------------------------------------------------
Net gain on investments 3,285,256,114
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,222,273,669
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year ended July 31
---------------------------------
2000 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment loss $ (62,982,445) $ (34,106,350)
--------------------------------------------------------------------------------------------------
Net realized gain on investments 2,412,270,912 973,668,754
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 872,985,202 (153,016,281)
--------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,222,273,669 786,546,123
--------------------------------------------------------------------------------------------------
Distributions to shareholders:
--------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (597,955,090) (249,821,333)
--------------------------------------------------------------------------------------------------
Class B (297,083,856) (127,241,919)
--------------------------------------------------------------------------------------------------
Class C (789,555) --
--------------------------------------------------------------------------------------------------
Class M (24,557,590) (10,117,862)
--------------------------------------------------------------------------------------------------
Class Y (92,304,043) (21,567,832)
--------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,631,399,814 504,115,872
--------------------------------------------------------------------------------------------------
Total increase in net assets 4,840,983,349 881,913,049
Net assets
--------------------------------------------------------------------------------------------------
Beginning of year 6,164,353,908 5,282,440,859
--------------------------------------------------------------------------------------------------
End of year $11,005,337,257 $6,164,353,908
--------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS A
------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.30 $13.49 $12.52 $9.79 $9.23
------------------------------------------------------------------------------------------------
Investment operations
------------------------------------------------------------------------------------------------
Net investment loss (.09)(c) (.05)(c) (.05)(c) (.03)(c) (.03)
------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 7.18 1.89 1.98 3.43 1.45
------------------------------------------------------------------------------------------------
Total from
investment operations 7.09 1.84 1.93 3.40 1.42
------------------------------------------------------------------------------------------------
Less distributions:
------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.10 $14.30 $13.49 $12.52 $9.79
------------------------------------------------------------------------------------------------
Ratios and supplemental data
------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 53.19 15.08 16.90 36.25 16.64
------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $6,763,532 $3,672,460 $3,279,628 $2,626,464 $1,220,639
------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .87 .94 .98 1.04 1.10
------------------------------------------------------------------------------------------------
Ratio of net investment (loss)
to average net assets (%) (.51) (.41) (.38) (.25) (.29)
------------------------------------------------------------------------------------------------
Portfolio turnover (%) 115.31 155.40 110.60 82.91 106.58
------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset and brokerage service arrangements. (Note 2)
(c) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Net investment loss was less than $0.01 per share.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS B
------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.51 $12.89 $12.09 $9.55 $9.08
------------------------------------------------------------------------------------------------
Investment operations
------------------------------------------------------------------------------------------------
Net investment loss (c) (.21) (.14) (.14) (.11) (.10)
------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 6.72 1.79 1.90 3.32 1.43
------------------------------------------------------------------------------------------------
Total from
investment operations 6.51 1.65 1.76 3.21 1.33
------------------------------------------------------------------------------------------------
Less distributions:
------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.73 $13.51 $12.89 $12.09 $9.55
------------------------------------------------------------------------------------------------
Ratios and supplemental data
------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 51.89 14.27 16.05 35.14 15.88
------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,880,568 $1,768,766 $1,585,961 $1,212,589 $488,085
------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.62 1.69 1.73 1.79 1.81
------------------------------------------------------------------------------------------------
Ratio of net investment (loss)
to average net assets (%) (1.26) (1.16) (1.13) (.99) (1.03)
------------------------------------------------------------------------------------------------
Portfolio turnover (%) 115.31 155.40 110.60 82.91 106.58
------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset and brokerage service arrangements. (Note 2)
(c) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Net investment loss was less than $0.01 per share.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS C
----------------------------------------------------------------
For the
Year period
Per-share ended July 26, 1999+
operating performance July 31 to July 31
----------------------------------------------------------------
2000 1999
----------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $14.30 $14.54
----------------------------------------------------------------
Investment operations
----------------------------------------------------------------
Net investment loss (c) (.24) --(d)
----------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 7.18 (.24)
----------------------------------------------------------------
Total from
investment operations 6.94 (.24)
----------------------------------------------------------------
Less distributions:
----------------------------------------------------------------
From net realized gain
on investments (2.29) --
----------------------------------------------------------------
Total distributions (2.29) --
----------------------------------------------------------------
Net asset value,
end of period $18.95 $14.30
----------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------
Total return at
net asset value (%)(a) 52.03 (1.65)*
----------------------------------------------------------------
Net assets, end of period
(in thousands) $91,914 $364
----------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.62 .01*
----------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (1.24) (.01)*
----------------------------------------------------------------
Portfolio turnover (%) 115.31 155.40
----------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset and brokerage service arrangements. (Note 2)
(c) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Net investment loss was less than $0.01 per share.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS M
------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.92 $13.22 $12.34 $9.72 $9.19
------------------------------------------------------------------------------------------------
Investment operations
------------------------------------------------------------------------------------------------
Net investment loss (c) (.17) (.12) (.11) (.08) (.08)
------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 6.94 1.85 1.95 3.37 1.47
------------------------------------------------------------------------------------------------
Total from
investment operations 6.77 1.73 1.84 3.29 1.39
------------------------------------------------------------------------------------------------
Less distributions:
------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86)
------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.40 $13.92 $13.22 $12.34 $9.72
------------------------------------------------------------------------------------------------
Ratios and supplemental data
------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 52.26 14.53 16.38 35.35 16.37
------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $241,432 $150,573 $128,259 $90,788 $22,232
------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.37 1.44 1.48 1.54 1.54
------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (1.01) (.91) (.88) (.73) (.82)
------------------------------------------------------------------------------------------------
Portfolio turnover (%) 115.31 155.40 110.60 82.91 106.58
------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset and brokerage service arrangements. (Note 2)
(c) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Net investment loss was less than $0.01 per share.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS Y
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.52 $13.64 $12.61 $9.84 $9.24
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment loss (.05)(c) (.02)(c) (.02)(c) --(c)(d) --(d)
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 7.30 1.93 2.01 3.44 1.46
-----------------------------------------------------------------------------------------------------
Total from
investment operations 7.25 1.91 1.99 3.44 1.46
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86)
-----------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.48 $14.52 $13.64 $12.61 $9.84
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 53.51 15.44 17.26 36.49 17.07
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,027,892 $572,191 $288,593 $242,742 $63,330
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .62 .69 .73 .79 .81
-----------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.26) (.17) (.13) .02 (.01)
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 115.31 155.40 110.60 82.91 106.58
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset and brokerage service arrangements. (Note 2)
(c) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Net investment loss was less than $0.01 per share.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
Note 1
Significant accounting policies
Putnam Vista Fund (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 C, class M and classY 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 C shares are subject to the same fees and
expenses as class B shares, except that class C shares have a one-year
1.00% contingent deferred sales charge and do not convert to class A
shares. 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 and class C shares. Class Y shares, which
are sold at net asset value, are generally subject to the same expenses
as class A, class B, class C and class M shares, but do not bear a
distribution fee. Class Y shares are sold to defined contribution plans
that invest at least $150 million in a combination of Putnam funds and
other accounts managed by affiliates of Putnam Investment Management,
Inc. ("Putnam Management") the fund's manager, a wholly-owned subsidiary
of Putnam Investments, Inc.
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
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities of the financial statements and the reported
amounts of increases and decreases in net assets from operations during
the reporting period. 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 sales price on its principal exchange, or if no sales
are reported -- as in the case of some securities traded
over-the-counter -- the last reported bid price. Short-term investments
having remaining maturities of 60 days or less are stated at amortized
cost, which approximates market value. Other investments, including
restricted securities, 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 Management. 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.
Collateral for certain tri-party repurchase agreements is held at the
counterparty's custodian in a segregated account for the benefit of the
fund and the counterparty. 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). Gains or losses on securities sold are determined
on the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Non-cash dividends, if any, are
recorded at the fair market value of the securities received.
E) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on
securities it owns or in which it may invest to increase its current
returns.
The potential risk to the fund is that the change in value of futures
and options contracts may not correspond to the change in value of the
hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is
unable to perform. When the contract is closed, the fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was
closed. Realized gains and losses on purchased options are included in
realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options. Options traded over-the-counter are valued using prices
supplied by dealers.
F) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the year ended
July 31, 2000, the fund had no borrowings against the line of credit.
G) 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, as amended. 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.
H) 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 at least 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. These differences include temporary and permanent
differences of losses on wash sale transactions and net operating loss.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations. For the year ended July 31,
2000, the fund reclassified $62,982,445 to decrease accumulated net
investment loss with a decrease to accumulated net realized gains of
$62,982,445. The calculation of net investment income per share in the
financial highlights table excludes these adjustments.
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% thereafter.
The fund reimburses Putnam Management an allocated amount 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 subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor
Services, a division of PFTC.
For the year ended July 31, 2000, fund expenses were reduced by
$2,010,028 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.
Each Trustee of the fund receives an annual Trustee fee, of which $4,085
has been allocated to the fund, and an additional fee for each Trustees
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral 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
invested in certain Putnam funds until distribution in accordance with
the Deferral 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 a 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, class C 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 Retail Management, Inc., a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plans provide for payments by
the fund to Putnam Retail Management, Inc. at an annual rate up to
0.35%, 1.00%, 1.00% and 1.00% of the average net assets attributable to
class A, class B, class C and class M shares, respectively. The Trustees
have approved payment by the fund to an annual rate of 0.25%, 1.00%,
1.00% and 0.75% of the average net assets attributable to class A, class
B, class C and class M shares respectively.
For the year ended July 31, 2000, Putnam Retail Management, Inc., acting
as underwriter received net commissions of $2,135,457 and $57,246 from
the sale of class A and class M shares, respectively and $1,976,041 and
$6,163 in contingent deferred sales charges from redemptions of class B
shares and class C shares, respectively. A deferred sales charge of up
to 1% is assessed on certain redemptions of class A shares. For the year
ended July 31, 2000, Putnam Retail Management, Inc., acting as
underwriter received $53,214 on class A redemptions.
Note 3
Purchases and sales of securities
During the year ended July 31, 2000, purchases and sales of investment
securities other than short-term investments aggregated $11,485,386,632
and $10,029,835,394, respectively. There were no purchases and sales of
U.S. government obligations.
Note 4
Capital shares
At July 31, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended July 31, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 148,875,856 $2,755,980,157
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 36,270,301 565,453,292
---------------------------------------------------------------------------
185,146,157 3,321,433,449
Shares
repurchased (87,755,256) (1,570,813,140)
---------------------------------------------------------------------------
Net increase 97,390,901 $1,750,620,309
---------------------------------------------------------------------------
Year ended July 31, 1999
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 90,285,502 $1,181,101,401
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 19,741,002 237,089,484
---------------------------------------------------------------------------
110,026,504 1,418,190,885
Shares
repurchased (96,354,534) (1,269,835,707)
---------------------------------------------------------------------------
Net increase 13,671,970 $ 148,355,178
---------------------------------------------------------------------------
Year ended July 31, 2000
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 58,287,478 $1,011,207,964
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 18,896,255 274,940,514
---------------------------------------------------------------------------
77,183,733 1,286,148,478
Shares
repurchased (45,717,778) (773,121,833)
---------------------------------------------------------------------------
Net increase 31,465,955 $ 513,026,645
---------------------------------------------------------------------------
Year ended July 31, 1999
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 32,910,754 $408,231,770
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 10,324,674 117,597,920
---------------------------------------------------------------------------
43,235,428 525,829,690
Shares
repurchased (35,300,737) (439,040,293)
---------------------------------------------------------------------------
Net increase 7,934,691 $ 86,789,397
---------------------------------------------------------------------------
Year ended July 31, 2000
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 5,066,652 $100,411,190
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 45,124 701,686
---------------------------------------------------------------------------
5,111,776 101,112,876
Shares
repurchased (286,103) (5,405,097)
---------------------------------------------------------------------------
Net increase 4,825,673 $ 95,707,779
---------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to July 31, 1999
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 25,418 $363,404
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
25,418 363,404
Shares
repurchased -- --
---------------------------------------------------------------------------
Net increase 25,418 $363,404
---------------------------------------------------------------------------
Year ended July 31, 2000
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 6,664,785 $115,622,841
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,594,786 24,049,323
---------------------------------------------------------------------------
8,259,571 139,672,164
Shares
repurchased (5,960,334) (100,918,376)
---------------------------------------------------------------------------
Net increase 2,299,237 $ 38,753,788
---------------------------------------------------------------------------
Year ended July 31, 1999
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 5,073,773 $65,459,985
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 839,474 9,838,634
---------------------------------------------------------------------------
5,913,247 75,298,619
Shares
repurchased (4,794,756) (61,863,878)
---------------------------------------------------------------------------
Net increase 1,118,491 $13,434,741
---------------------------------------------------------------------------
Year ended July 31, 2000
---------------------------------------------------------------------------
Class Y Shares Amount
---------------------------------------------------------------------------
Shares sold 28,686,680 $543,717,958
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,811,982 92,304,043
---------------------------------------------------------------------------
34,498,662 636,022,001
Shares
repurchased (21,142,358) (402,730,708)
---------------------------------------------------------------------------
Net increase 13,356,304 $233,291,293
---------------------------------------------------------------------------
Year ended July 31, 1999
---------------------------------------------------------------------------
Class Y Shares Amount
---------------------------------------------------------------------------
Shares sold 24,211,223 $335,781,867
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,772,091 21,566,352
---------------------------------------------------------------------------
25,983,314 357,348,219
Shares
repurchased (7,720,337) (102,175,067)
---------------------------------------------------------------------------
Net increase 18,262,977 $255,173,152
---------------------------------------------------------------------------
Note 5
Transactions with affiliated issuers
Transactions during the year with companies in which the fund owns at
least 5% of the voting securities were as follows:
<TABLE>
<CAPTION>
Purchase Sales Dividend Market
Affiliates cost cost Income Value
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Amerisource Health
Corp. Class A $ 3,738,187 $ 91,093,512 $ -- $ --
Ann Taylor 16,890,433 77,774,698 -- --
Furniture Brands Intl. Inc. 11,409,933 73,696,652 -- --
IDEXX Laboratories, Inc. 4,733,074 605,901 -- 45,477,116
Linens 'N Things, Inc. 40,452,333 27,856,921 -- 85,321,875
Radio One Inc. Class A 100,279,713 -- -- 36,027,417
Sawtek, Inc. 129,907,798 -- -- 114,801,675
Spanish Broadcasting
Sys., Inc. Class A 111,664,175 11,452,379 -- 43,983,544
Westpoint Stevens, Inc. 20,380,685 102,737,826 151,380 --
------------------------------------------------------------------------------------------------------------------
Totals $439,456,331 $385,217,889 $151,380 $325,611,627
</TABLE>
Note 6
Change in Independent Accountants (unaudited)
Based on the recommendation of the Audit Committee of the fund, the
Board of Trustees has determined not to retain PricewaterhouseCoopers
LLP as this funds' independent accountants and voted to appoint KPMG LLP
for the fund's fiscal year ended July 31, 2000. During the two previous
fiscal years, PricewaterhouseCoopers LLP audit reports contained no
adverse opinion or disclaimer of opinion; nor were its reports qualified
or modified as to uncertainty, audit scope, or accounting principle.
Further, in connection with its audits for the two previous fiscal years
and through July 24, 2000, there were no disagreements between the fund
and PricewaterhouseCoopers LLP on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure, which if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have caused it to make reference to the
disagreements in its report on the financial statements for such years.
FEDERAL TAX INFORMATION
Pursuant to Section 852 of the Internal Revenue Code, as amended, The
Fund hereby designates $1,044,073,061 as capital gain, for its taxable
year ended July 31, 2000.
The Form 1099 you receive in January 2001 will show the tax status of
all distributions paid to your account in calendar 2000.
THE PUTNAM FAMILY OF FUNDS
The following is a complete list of Putnam's open-end mutual funds.
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.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Technology Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Fund
Balanced Retirement Fund
Classic Equity Fund *
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market 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
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION 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
* Formerly Putnam Growth and Income Fund II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at
www.putnaminvestments.com.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
KPMG LLP
TRUSTEES
John A. Hill, Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam, III
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
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Eric M. Wetlaufer
Vice President and Fund Manager
Anthony C. Santosus
Vice President and Fund Manager
Dana F. Clark
Vice President and Fund Manager
Margery C. Parker
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
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, and Putnam Quarterly Ranking
Summary. For more information or to request a prospectus, call toll
free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site:
www.putnaminvestments.com.
Not FDIC Insured, May Lose Value, No Bank Guarantee
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
---------------------
PRST STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
63660/AN015 006/317/515/376 9/00
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
---------------------------------------------------------------------------
Putnam Vista Fund
Supplement to Annual Report dated 7/31/00
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 $150 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, C, and M shares, which are discussed more extensively in the annual
report.
ANNUAL RESULTS AT A GLANCE
---------------------------------------------------------------------------
Total return
for periods ended 7/31/00 NAV
1 year 53.51%
5 years 232.04
Annual average 27.13
10 years 625.76
Annual average 21.92
Life of fund (since class A inception, 6/3/68)
Annual average 12.93
Share value: NAV
7/31/99 $14.52
7/31/00 $19.48
---------------------------------------------------------------------------
Distributions: Capital gains
No. Income Short Term Long Term Total
1 $-- 0.455 1.835 $2.290
---------------------------------------------------------------------------
Please note that past performance does not indicate future results. Returns
shown for class Y shares for periods prior to their inception are derived
from the historical performance of class A shares, adjusted to reflect the
initial sales charge currently applicable to class A shares. These returns
have not been adjusted to reflect differences in operating expenses which,
for class Y shares, are lower than the operating expenses applicable to
class A shares. All returns assume reinvestment of distributions at net
asset value. Performance data reflects an expense limitation previously in
effect. Without the expense limitation, total returns would have been
lower. 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.
