Putnam
Vista
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
1-31-00
[SCALE LOGO OMITTED]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The markets continued to provide their share of challenges and
opportunities as your fund closed its books on the first half of fiscal
2000. In the following report, the fund's managers discuss performance for
the period and prospects for the months ahead.
This is the last letter to you and the other shareholders of Putnam Vista
Fund that I will be signing. After more than 30 years as Chairman of the
Trustees and President of the Putnam Funds, the time has come for me to
step aside. In June, John Hill will become Chairman. John is currently an
independent Trustee and has served on the board for the past 14 years. In
addition, my son, George Putnam, III, will take on the role of President.
I am confident that the leadership of the funds will be in exceptionally
strong hands.
I will become Chairman Emeritus, remain a Putnam shareholder, and stay in
close touch with the funds. It has been my privilege to serve you.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
March 15, 2000
Report from the Fund Managers
Eric Wetlaufer
Anthony C. Santosus
Dana Clark
Margery Parker
During the six months ended January 31, 2000, the environment for
growth-style investing proved to be extraordinary, especially for the
midsize growth companies that make up Putnam Vista Fund's portfolio. The
fund's strong performance, like that of the overall market, was bolstered
by sharp price gains in the technology sector, especially among
Internet-related businesses. Other pockets of growth such as
telecommunications and biotechnology inspired investors to bid up share
prices. But technology was the place to be, and investments in that sector
propelled the fund's vibrant performance during the six months ended
January 31, 2000.
Total return for 6 months ended 1/31/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------
36.99% 29.13% 36.38% 31.38% 36.47% 35.47% 36.62% 31.88%
- --------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 6.
* MARKET DRIVEN BY SPECULATION
Speculation ran rampant throughout the technology sector during this
period. Investors lifted valuations based on hopes that exceptionally high
growth rates would be sustained into the future at a pace we have not seen
before. As a general matter, it is difficult to put together a strong
portfolio of companies with growth rates of better than 20% a year.
Currently, however, there are many companies offering growth potential as
high as 50% to 70% a year. The question is this: How much will an investor
pay for this kind of company? At present, the market is willing to pay a
high price for expectations of strong and sustained success for years to
come. Some companies may, in fact, follow through with this kind of
performance, but not all of these stocks are fairly valued now.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Technology 53.4%
Consumer staples 10.8%
Consumer cyclicals 10.0%
Health care 8.8%
Communication
services 5.9%
Footnote reads:
*Based on net assets as of 1/31/00. Holdings will vary over time.
For our part, we see many stocks selling at high prices for reasons that
we do not understand, given the uncertainty regarding the sustainability
of their business models. As a result, we are not chasing the stocks that
are doing well just because they happen to be in fashion. Instead, we
follow a process that is strictly disciplined, keeping a sharp eye on
risk. Some sectors of our market have benefited from strong share-price
momentum that has driven valuations high. We have participated in some of
these areas because we found companies we believe in and we did not want
to take the risk of missing out on this kind of stellar performance. In
fact, some investments with fairly speculative valuations have helped the
fund's performance a great deal over the past year. At the same time, we
have made sure to invest in them in a very measured, prudent way. That is,
we have not gone overboard by taking on big bets or overweighting these
groups and have confirmed our belief in the sustainability of the
companies' business models with thorough research.
* TECHNOLOGY STOCKS DOMINATED MARKET
The explosive growth of technology was a driving force behind your fund's
performance during the period. Some of the best results came from
Internet-related software services firms, including VERITAS Software, a
data-management software provider. VeriSign was another software company
that did extremely well. Many shareholders will recognize the product this
company provides by the small padlock that appears on the bottom of the
computer screen when one is transacting business via a secure server on
the Internet. This icon is called a digital certificate, which ensures the
security of the transaction. With e-commerce booming, VeriSign has
profited from issuing and receiving fees for this product. Siebel Systems
was another software company that provided strong performance through its
customer-service management products.
Your fund also benefited from its computer hardware investments, including
JDS Uniphase and E-Tek Dynamics. These are two of the few companies that
offer equipment for switching and manipulating the signals within
fiber-optic networking systems. While these and other holdings were viewed
favorably at the end of the period, all portfolio holdings are subject to
review and adjustment in accordance with the fund's investment strategy
and may vary in the future.
* TELECOMMUNICATIONS AND BIOTECHNOLOGY ALSO OFFERED STRONG GROWTH
Telecommunications and biotechnology proved to be two high-growth areas
that also helped your fund over the semiannual period. In telecom,
successful investments included Comverse, a company that provides an
extensive range of communication services, including such conventional
services as voice mail, call forwarding, and fax services, as well as some
more innovative messaging services. The fund has also benefited from our
investments in competitive local exchange carriers (CLECs), independent
telephone companies that offer communications services to both business
and residential customers. One example is McLeod, a CLEC that focuses its
business on midsize cities and towns in the Midwest and Rocky Mountain
regions. With weak competition from the larger telephone carriers, McLeod
is able to go into these areas and capture a significant share of the
market through aggressive pricing and service offerings.
"Mid-cap stocks have different risk-return characteristics than large or small
caps. Many investors say that mid-caps give you a great deal of the return of
small caps without as much risk."
- -- Mary Roland, MSN MoneyCentral.com
In the health care sector, your fund benefited from its investments in
biotech companies Medimmune and Immunex. Medimmune manufactures products
for the prevention of infectious diseases and has especially profited from
Respigan, a drug that helps prevent respiratory infections in babies born
prematurely. Immunex produces therapeutic products for cancer, infections,
and auto-immune diseases, including Leukine, which facilitates bone marrow
transplants.
* OTHER COMPANIES PERFORMED, BUT MARKET DID NOT CARE
On the flip side of the speculation-driven sectors of the market, one
could find a significant number of companies that fared quite well but
whose stocks nevertheless did poorly. Witness the consumer staples
industry. The fund holds an investment in U.S. Food Services, which offers
20% earnings growth and has only one significant competitor. But this
company did not captivate investors because it did not offer accelerating
sales and earnings momentum. Another fund holding, retailer Linens 'N
Things, performed admirably, but its stock faltered. These examples point
to a dichotomy in the market. Investors stampeded toward companies
enjoying accelerating momentum and ignored nearly everything else. In
spite of positive fundamentals, many of the forsaken stocks continued to
drop as investors liquidated those positions in order to reallocate assets
to the high-momentum segments of the market. To diversify the fund
properly, we continue to maintain these holdings in the belief that the
market at some point will come to appreciate the companies' solid
performance and growth prospects.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
VERITAS Software Corp.
Technology
JDS Uniphase Corp.
Technology
Comverse Technology, Inc.
Technology
PE Corp.-PE Biosystems Group
Health care
VeriSign, Inc.
Technology
Symbol Technologies, Inc.
Technology
Analog Devices, Inc.
Technology
Immunex Corp.
Health care
Maxim Integrated Products, Inc.
Technology
Network Appliance, Inc.
Technology
Footnote reads:
These holdings represent 25.4% of the fund's net assets as of 1/31/00.
Portfolio holdings will vary over time.
* OUTLOOK IS BRIGHT
Looking ahead, we believe the environment will stay positive for midsize
companies offering strong earnings growth. While interest rates have
risen, they remain at fairly reasonable levels. Furthermore, higher
interest rates should not really hamper these growth companies because
their access to capital is more tied to the valuation of their equity than
to any significant borrowing.
With consumer demand strong and employment high, the backdrop seems ripe
for the areas in which we invest. One Achilles heel may be the continuing
supply of new companies that Wall Street is bringing to market. Fully one
third of the mid-cap growth stock companies that make up the fund's
investing universe were not public two years ago. The investing public may
become overwhelmed trying to keep track of all these new names.
Fortunately, this will be less of a challenge for Putnam because we have
the resources in place to perform the kind of financial analysis that
should help us continue to uncover fertile investment opportunities.
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 1/31/00, 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 1/31/00
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>
6 months 36.99% 29.13% 36.38% 31.38% 36.47% 35.47% 36.62% 31.88%
- ------------------------------------------------------------------------------------------
1 year 43.19 35.00 42.06 37.06 42.13 41.13 42.45 37.51
- ------------------------------------------------------------------------------------------
5 years 279.64 258.02 265.81 263.81 265.87 265.87 271.26 258.15
Annual average 30.58 29.06 29.61 29.47 29.62 29.62 30.00 29.07
- ------------------------------------------------------------------------------------------
10 years 580.18 540.76 529.58 529.58 531.23 531.23 546.35 523.84
Annual average 21.13 20.41 20.20 20.20 20.23 20.23 20.52 20.09
- ------------------------------------------------------------------------------------------
Annual average
(Life of fund) 12.70 12.49 11.65 11.65 11.85 11.85 11.94 11.81
- ------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/00
Russell Midcap Consumer
Growth Index* price index
- -------------------------------------------------------------------------
6 months 36.82% 1.44%
- -------------------------------------------------------------------------
1 year 46.86 2.67
- -------------------------------------------------------------------------
5 years 239.78 12.28
Annual average 27.72 2.34
- -------------------------------------------------------------------------
10 years 525.17 32.73
Annual average 20.12 2.87
- -------------------------------------------------------------------------
Annual average n/a 390.14
(Life of fund) n/a 5.15
- -------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. 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-, 5-, and 10-year
(where available) 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.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 1/31/00
Class A Class B Class C Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1 1
- ------------------------------------------------------------------------------
Income -- -- -- --
- ------------------------------------------------------------------------------
Capital gains
Long-term $1.835 $1.835 $1.835 $1.835
- ------------------------------------------------------------------------------
Short-term 0.455 0.455 0.455 0.455
- ------------------------------------------------------------------------------
Total $2.290 $2.290 $2.290 $2.290
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------------------
7/31/99 $14.30 $15.17 $13.51 $14.30 $13.92 $14.42
- ------------------------------------------------------------------------------
1/31/00 17.08 18.12 15.92 17.01 16.51 17.11
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 12/31/99 (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>
6 months 36.22% 28.36% 35.74% 30.74% 35.79% 34.79% 35.87% 31.11%
- --------------------------------------------------------------------------------------------
1 year 53.21 44.37 52.17 47.17 52.12 51.12 52.50 47.19
- --------------------------------------------------------------------------------------------
5 years 284.85 262.63 270.62 268.62 270.99 270.99 275.35 262.24
Annual average 30.94 29.39 29.95 29.81 29.98 29.98 30.28 29.36
- --------------------------------------------------------------------------------------------
10 years 554.04 516.49 505.74 505.74 506.97 506.97 520.74 498.78
Annual average 20.66 19.95 19.74 19.74 19.76 19.76 20.03 19.60
- --------------------------------------------------------------------------------------------
Annual average
(Life of fund) 12.81 12.60 11.77 11.77 11.96 11.96 12.05 11.92
- --------------------------------------------------------------------------------------------
</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.
Welcome to www.putnaminv.com
Now you can use your PC to get up-to-date information about your funds, learn
more about investing and retirement planning, and access market news and
economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
* the benefits of investing with Putnam
* Putnam's money management philosophy
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The site can be accessed through any of the major online services (America
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Internet service provider.
New features will be added to the site regularly. So be sure to bookmark us at
http://www.putnaminv.com
A guide to the financial statements
These sections of the report 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.
<TABLE>
<CAPTION>
The fund's portfolio
January 31, 2000 (Unaudited)
COMMON STOCKS (99.4%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Basic Materials (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,920,614 Ecolab, Inc. $ 67,581,605
1,120,900 Praxair, Inc. 45,466,506
871,700 Sealed Air Corp. (NON) 48,924,163
--------------
161,972,274
Capital Goods (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,875,700 Danaher Corp. 80,889,563
704,500 PerkinElmer, Inc. 35,269,031
--------------
116,158,594
Communication Services (5.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,063,300 Allegiance Telecom, Inc. (NON) 112,045,238
1,884,918 McLeod, Inc. Class A (NON) 129,588,113
871,700 NTL, Inc. (NON) 109,670,756
670,600 Omnipoint Corp. (NON) 68,778,413
883,500 Telephone and Data Systems, Inc. 91,884,000
--------------
511,966,520
Consumer Cyclicals (10.0%)
- --------------------------------------------------------------------------------------------------------------------------
109,400 Abercrombie & Fitch Co. Class A (NON) 2,338,425
2,873,900 BJ's Wholesale Club, Inc. (NON) 100,586,500
2,241,600 Circuit City Stores, Inc. 86,301,600
3,669,000 Family Dollar Stores, Inc. 58,933,313
3,008,000 Furniture Brands International, Inc. (NON) (AFF) 51,136,000
1,151,200 Harley-Davidson, Inc. 80,799,850
3,783,900 Harrah's Entertainment, Inc. (NON) 75,441,506
986,700 Kohls Corp. (NON) 69,192,338
2,691,900 Linens 'N Things, Inc. (NON) (AFF) 52,828,538
1,471,100 Royal Caribbean Cruises Ltd. 72,727,506
1,990,200 Tandy Corp. 97,271,025
948,400 Tiffany & Co. 70,181,600
1,274,100 Valassis Communications, Inc. (NON) 43,319,400
389,100 ZDNET Group (NON) 10,821,838
--------------
871,879,439
Consumer Staples (10.8%)
- --------------------------------------------------------------------------------------------------------------------------
2,988,800 Darden Restaurants, Inc. 47,447,200
1,063,300 DoubleClick, Inc. (NON) 105,067,331
1,886,700 Estee Lauder Cos. Class A 96,457,538
2,040,400 Interpublic Group Cos., Inc. 93,858,400
977,100 Omnicom Group, Inc. 91,542,056
556,662 Radio One, Inc. (NON) 42,584,643
2,411,877 Spanish Broadcasting System, Inc. Class A (NON) 82,606,787
613,100 TMP Worldwide, Inc. (NON) 85,910,638
4,828,100 U.S. Foodservice (NON) 87,207,556
756,800 Univision Communications, Inc. Class A (NON) 81,072,200
849,300 World Wrestling Federation Entertainment, Inc. (NON) 13,111,069
2,137,400 Young & Rubicam, Inc. 115,152,425
--------------
942,017,843
Energy (2.4%)
- --------------------------------------------------------------------------------------------------------------------------
929,200 Cooper Cameron Corp. (NON) 45,995,400
3,429,500 Global Marine, Inc. (NON) 61,087,969
1,197,400 Murphy Oil Corp. 68,700,825
647,800 Smith International, Inc. (NON) 33,240,238
--------------
209,024,432
Financial (2.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,312,400 Finova Group, Inc. 42,406,925
415,800 Greenpoint Financial Corp. 8,238,038
1,571,100 Intuit, Inc. (NON) 94,756,969
96,312 M & T Bank Corp. 39,584,232
1,140,000 Zions Bancorp 67,402,500
--------------
252,388,664
Health Care (8.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,379,500 Allergan, Inc. 78,631,500
97,700 Gene Logic, Inc. (NON) 6,570,325
1,733,900 IDEXX Laboratories, Inc. (NON) 26,116,869
1,456,100 Immunex Corp. (NON) 190,385,075
1,724,300 IMS Health, Inc. 38,688,981
1,705,200 IVAX Corp. (NON) 56,697,900
1,053,000 Medimmune, Inc. (NON) 153,738,000
1,446,300 PE Corp.-PE Biosystems Group 216,583,425
--------------
767,412,075
Technology (53.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,436,900 ADC Telecommunications, Inc. (NON) 94,745,594
1,201,100 Altera Corp. (NON) 78,972,325
2,097,900 Analog Devices, Inc. (NON) 196,153,650
736,600 Apple Computer, Inc. (NON) 76,422,250
305,200 Applied Micro Circuits Corp. (NON) 45,093,300
1,504,000 BEA Systems, Inc. (NON) 113,364,000
468,200 CheckFree Holdings Corp. (NON) 27,623,800
1,436,900 CMG Information Services, Inc. (NON) 161,741,056
919,600 Computer Sciences Corp. (NON) 84,488,250
1,702,810 Comverse Technology, Inc. (NON) 244,140,384
855,700 Conexant Systems, Inc. (NON) 72,306,650
2,526,000 Convergys Corp. (NON) 74,201,250
996,300 DII Group, Inc., (The) (NON) 77,462,325
718,500 E-Tek Dynamics, Inc. (NON) 130,767,000
2,691,825 Fiserv, Inc. (NON) 91,353,811
1,494,400 Gateway, Inc. (NON) 91,438,600
501,200 I2 Technologies, Inc. (NON) 96,543,650
2,212,900 Jabil Circuit, Inc. (NON) 139,965,925
1,226,200 JDS Uniphase Corp. (NON) 250,068,163
363,462 Juniper Networks, Inc. (NON) 49,180,952
507,700 LAM Research Corp. (NON) 63,399,038
680,600 Legato Systems, Inc. (NON) 17,142,613
1,293,200 Lexmark International Group, Inc. Class A (NON) 121,884,100
1,408,200 LSI Logic Corp. (NON) 115,120,350
958,000 Macromedia, Inc. (NON) 65,563,125
3,506,100 Maxim Integrated Products, Inc. (NON) 175,743,263
1,730,600 Network Appliance, Inc. (NON) 173,708,975
718,500 Peregrine Systems, Inc. (NON) 54,561,094
364,000 Phone.com, Inc. (NON) 40,040,000
577,200 PMC - Sierra, Inc. (NON) 104,184,600
375,800 Portal Software, Inc. (NON) 18,649,075
2,672,700 Rational Software Corp. (NON) 138,980,400
137,700 Reback Networks, Inc. (NON) 25,638,019
546,000 Sanmina Corp. (NON) 58,012,500
572,600 Sawtek, Inc. (NON) 36,216,950
747,200 SCI Systems, Inc. (NON) 53,798,400
1,767,500 Siebel Systems, Inc. (NON) 162,057,656
3,424,700 Symbol Technologies, Inc. 204,411,781
1,599,800 Teradyne, Inc. (NON) 103,587,050
1,312,400 VeriSign, Inc. 211,788,550
2,368,599 VERITAS Software Corp. (NON) 345,519,378
1,379,500 Vitesse Semiconductor Corp. (NON) 60,008,250
1,935,100 Xilinx, Inc. (NON) 88,530,825
--------------
4,634,578,927
Utilities (2.0%)
- --------------------------------------------------------------------------------------------------------------------------
1,868,000 Calpine Corp. (NON) 136,597,500
843,000 Florida Progress Corp. 35,722,125
--------------
172,319,625
--------------
Total Common Stocks (cost $5,634,455,498) $8,639,718,393
SHORT-TERM INVESTMENTS (0.6%) (Cost $49,813,083) (a)
PRINCIPAL AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
$50,000,000 Federal Home Loan Bank, effective yield of 5.75%,
February 25, 2000 $ 49,813,083
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $5,684,268,581) (b) $8,689,531,476
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $8,688,629,283.
(b) The aggregate identified cost on a tax basis is $5,696,664,110, resulting in gross unrealized appreciation and
depreciation of $3,326,599,970 and $333,732,604, respectively, or net unrealized appreciation of $2,992,867,366.
(NON) Non-income-producing security.
(AFF) Affiliated Companies (Note 5).
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
January 31, 2000 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $5,684,268,581) (Note 1) $8,689,531,476
- -----------------------------------------------------------------------------------------------
Cash 422,498
- -----------------------------------------------------------------------------------------------
Dividends, interest, and other receivables 389,606
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 28,044,021
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 117,284,954
- -----------------------------------------------------------------------------------------------
Total assets 8,835,672,555
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 113,113,803
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 19,783,861
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 9,384,169
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 885,736
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 50,555
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,848
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 3,319,294
- -----------------------------------------------------------------------------------------------
Other accrued expenses 503,006
- -----------------------------------------------------------------------------------------------
Total liabilities 147,043,272
- -----------------------------------------------------------------------------------------------
Net assets $8,688,629,283
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $5,517,536,421
- -----------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (27,000,768)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 192,830,735
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 3,005,262,895
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $8,688,629,283
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($5,265,263,934 divided by 308,246,119 shares) $17.08
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $17.08)* $18.12
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($2,385,536,753 divided by 149,815,654 shares)** $15.92
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($13,860,816 divided by 814,769 shares)** $17.01
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($202,994,776 divided by 12,297,506 shares) $16.51
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $16.51)* $17.11
- -----------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($820,973,004 divided by 47,181,634 shares) $17.40
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended January 31, 2000 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (including dividend income of $--
from investments in affiliated issuers)(Note 5) $ 8,568,663
- -----------------------------------------------------------------------------------------------
Interest 2,705,694
- -----------------------------------------------------------------------------------------------
Total investment income 11,274,357
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 16,814,731
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 4,853,801
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 36,828
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 17,293
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 5,332,180
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 9,997,638
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 22,946
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 639,744
- -----------------------------------------------------------------------------------------------
Reports to shareholders 89,666
- -----------------------------------------------------------------------------------------------
Registration fees 326,090
- -----------------------------------------------------------------------------------------------
Auditing 32,222
- -----------------------------------------------------------------------------------------------
Legal 13,552
- -----------------------------------------------------------------------------------------------
Postage 377,227
- -----------------------------------------------------------------------------------------------
Other 313,539
- -----------------------------------------------------------------------------------------------
Total expenses 38,867,457
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (592,332)
- -----------------------------------------------------------------------------------------------
Net expenses 38,275,125
- -----------------------------------------------------------------------------------------------
Net investment loss (27,000,768)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (including realized loss of $103,483,629
on sales of investments in affiliated issuers) (Notes 1, 3 and 5) 269,404,607
- -----------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (3,313,409)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 2,036,000,680
- -----------------------------------------------------------------------------------------------
Net gain on investments 2,302,091,878
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $2,275,091,110
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
January 31 July 31
2000* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (27,000,768) $ (34,106,350)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments 266,091,198 973,668,754
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 2,036,000,680 (153,016,281)
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,275,091,110 786,546,123
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (597,895,494) (249,821,333)
- ---------------------------------------------------------------------------------------------------------------
Class B (297,068,863) (127,241,919)
- ---------------------------------------------------------------------------------------------------------------
Class C (789,623) --
- ---------------------------------------------------------------------------------------------------------------
Class M (24,557,543) (10,117,862)
- ---------------------------------------------------------------------------------------------------------------
Class Y (92,302,070) (21,567,832)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,261,797,858 504,115,872
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 2,524,275,375 881,913,049
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 6,164,353,908 5,282,440,859
- ---------------------------------------------------------------------------------------------------------------
End of period (including accumulated
net investment loss of $27,000,768 and
$--, respectively) $8,688,629,283 $6,164,353,908
- ---------------------------------------------------------------------------------------------------------------
*Unaudited
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
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share January 31
operating performance (Unaudited) Year ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.30 $13.49 $12.52 $9.79 $9.23 $7.09
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04)(c) (.05)(c) (.05)(c) (.03)(c) (.03) .02
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.11 1.89 1.98 3.43 1.45 2.18
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.07 1.84 1.93 3.40 1.42 2.20
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.08 $14.30 $13.49 $12.52 $9.79 $9.23
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 36.99* 15.08 16.90 36.25 16.64 31.22
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,265,264 $3,672,460 $3,279,628 $2,626,464 $1,220,639 $859,403
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .45* .94 .98 1.04 1.10 1.07
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.28)* (.41) (.38) (.25) (.29) .26
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 52.53* 155.40 110.60 82.91 106.58 114.51
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 for the year ended July 31, 1996 and thereafter, includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts (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.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share January 31
operating performance (Unaudited) Year ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.51 $12.89 $12.09 $9.55 $9.08 $7.03
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.10)(c) (.14)(c) (.14)(c) (.11)(c) (.10)(c) (.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.80 1.79 1.90 3.32 1.43 2.14
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.70 1.65 1.76 3.21 1.33 2.11
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.92 $13.51 $12.89 $12.09 $9.55 $9.08
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 36.38* 14.27 16.05 35.14 15.88 30.19
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,385,537 $1,768,766 $1,585,961 $1,212,589 $488,085 $258,522
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .83* 1.69 1.73 1.79 1.81 1.82
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.66)* (1.16) (1.13) (.99) (1.03) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 52.53* 155.40 110.60 82.91 106.58 114.51
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 for the year ended July 31, 1996 and thereafter, includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts (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.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share January 31 July 26, 1999+
operating performance (Unaudited) to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $14.30 $14.54
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.10)(c) --(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.10 (.24)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.00 (.24)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.29) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.01 $14.30
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 36.47* (1.65)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $13,861 $364
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .83* .01*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.68)* (.01)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 52.53* 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 for the year ended July 31, 1996 and thereafter, includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts (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.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share January 31 Dec. 8, 1994+
operating performance (Unaudited) Year ended July 31 to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.92 $13.22 $12.34 $9.72 $9.19 $6.73
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.08)(c) (.12)(c) (.11)(c) (.08)(c) (.08)(c) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.96 1.85 1.95 3.37 1.47 2.53
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.88 1.73 1.84 3.29 1.39 2.52
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.29) (1.03) (.96) (.67) (.86) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $16.51 $13.92 $13.22 $12.34 $9.72 $9.19
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 36.62* 14.53 16.38 35.35 16.37 37.63*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $202,995 $150,573 $128,259 $90,788 $22,232 $3,148
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .70* 1.44 1.48 1.54 1.54 1.06*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.53)* (.91) (.88) (.73) (.82) (.31)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 52.53* 155.40 110.60 82.91 106.58 114.51
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 for the year ended July 31, 1996 and thereafter, includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts (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.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share January 31 March 28, 1995+
operating performance (Unaudited) Year ended July 31 to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.52 $13.64 $12.61 $9.84 $9.24 $7.83
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.02)(c) (.02)(c) (.02)(c) --(c) -- .01
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.19 1.93 2.01 3.44 1.46 1.40
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.17 1.91 1.99 3.44 1.46 1.41
- ------------------------------------------------------------------------------------------------------------------------------------
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 $17.40 $14.52 $13.64 $12.61 $9.84 $9.24
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 37.12* 15.44 17.26 36.49 17.07 18.01*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $820,973 $572,191 $288,593 $242,742 $63,330 $42,717
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .33* .69 .73 .79 .81 .29*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.16)* (.17) (.13) .02 (.01) .10*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 52.53* 155.40 110.60 82.91 106.58 114.51
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 for the year ended July 31, 1996 and thereafter, includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts (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.
</TABLE>
Notes to financial statements
January 31, 2000 (Unaudited)
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 class Y shares.
Class A shares are sold with a maximum front-end sales charge of 5.75%.
Class B shares, which convert to class A shares after approximately eight
years, do not pay a front-end sales charge, but pay a higher ongoing
distribution fee than class A shares, and are subject to a contingent
deferred sales charge, if those shares are redeemed within six years of
purchase. Class 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 shares. Class Y shares, which are sold at net asset
value, are generally subject to the same expenses as class A shares, class
B shares, class C shares 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.
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 six months
ended January 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.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.65% of the first $500
million of average net assets, 0.55% of the next $500 million, 0.50% of
the next $500 million, 0.45% of the next $5 billion, 0.425% of the next $5
billion, 0.405% of the next $5 billion, 0.39% of the next $5 billion and
0.38% 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 six months ended January 31, 2000, fund expenses were reduced by
$592,332 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 $3,778
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 Mutual Funds Corp., a wholly-owned subsidiary of Putnam
Investments Inc., for services provided and expenses incurred by it in
distributing shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00%,
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 at 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 six months ended January 31, 2000, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $535,995 and $16,528
from the sale of class A and class M shares, respectively, and received
$999,442 and $318 in contingent deferred sales charges from redemptions of
class B and class C shares, respectively. A deferred sales charge of up to
1% is assessed on certain redemptions of class A shares. For the six
months ended January 31, 2000, Putnam Mutual Funds Corp., acting as
underwriter received $16,378 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended January 31, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $3,832,896,190 and $3,695,320,128, respectively.
There were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At January 31, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended January 31, 2000
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 54,216,051 $ 869,286,445
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 36,265,978 565,390,890
- -----------------------------------------------------------------------------
90,482,029 1,434,677,335
Shares
repurchased (39,010,260) (610,169,372)
- -----------------------------------------------------------------------------
Net increase 51,471,769 $ 824,507,963
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Six months ended January 31, 2000
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 19,342,228 $ 291,898,680
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 18,895,575 274,930,616
- -----------------------------------------------------------------------------
38,237,803 566,829,296
Shares
repurchased (19,392,230) (289,622,072)
- -----------------------------------------------------------------------------
Net increase 18,845,573 $ 277,207,224
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Six months ended January 31, 2000
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 755,440 $12,337,681
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 45,129 701,753
- -----------------------------------------------------------------------------
800,569 13,039,434
Shares
repurchased (11,218) (176,903)
- -----------------------------------------------------------------------------
Net increase 789,351 $12,862,531
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Six months ended January 31, 2000
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,988,946 $45,276,098
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,594,782 24,049,276
- -----------------------------------------------------------------------------
4,583,728 69,325,374
Shares
repurchased (3,106,190) (46,856,317)
- -----------------------------------------------------------------------------
Net increase 1,477,538 $22,469,057
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Six months ended January 31, 2000
- -----------------------------------------------------------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Shares sold 9,128,104 $147,735,872
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,811,858 92,292,301
- -----------------------------------------------------------------------------
14,939,962 240,028,173
Shares
repurchased (7,178,470) (115,277,090)
- -----------------------------------------------------------------------------
Net increase 7,761,492 $124,751,083
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Note 5
Transactions with affiliated issuers
Transactions during the year with companies in which the fund owned at
least 5% of the voting securities were as follows:
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <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. 5,355,935 6,563,843 -- 51,136,000
Linens N Things 23,819,597 2,645,774 -- 52,828,538
Westpoint Stevens, Inc. 20,380,685 102,737,826 -- --
- -------------------------------------------------------------------------------------------------------------------
Totals $70,184,837 $280,815,653 $ -- $103,964,538
</TABLE>
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 [DBL. DAGGER]
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 [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement 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
Growth and Income Fund II
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 Diversified Income Trust 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.putnaminv.com.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice 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
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
John J. Morgan, Jr.
Vice President
Eric Wetlaufer
Vice President and Fund Manager
Anthony C. Santosus
Vice President and Fund Manager
Dana Clark
Vice President and Fund Manager
Margery Parker
Vice President and Fund Manager
Richard A. Monaghan
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. 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.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
SA015-58960 006/317/515 3/00
PUTNAM INVESTMENTS
[SCALE LOGO OMITTED]
- -----------------------------------------------------------------------------
Putnam Vista Fund
Supplement to Semiannual Report dated 1/31/00
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 semiannual report.
SEMIANNUAL RESULTS AT A GLANCE
- -----------------------------------------------------------------------------
Total return
for periods ended 1/31/00 NAV
6 months 37.12%
1 year 43.64
5 years 284.90
Annual average 30.94
10 years 589.59
Annual average 21.30
Annual average (Life of fund since class A inception, 6/3/68) 12.75
Share value: NAV
7/31/99 $14.52
1/31/00 17.40
- -----------------------------------------------------------------------------
Distributions: No. Income Capital gains Total
1 -- 2.290 $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 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.
