<PAGE> 1
PUTNAM
VOYAGER
FUND
SEMIANNUAL REPORT
January 31, 1995
[SCALE LOGO]
BOSTON * LONDON * TOKYO
<PAGE> 2
PERFORMANCE HIGHLIGHTS
The long-term performance of Putnam Voyager Fund's class A shares is truly
impressive. According to Lipper Analytical Services, the fund's class A shares
were the number-one fund out of 45 capital appreciation funds for 10-year
performance as of January 31, 1995.
Performance should always be considered in light of a fund's investment
strategy. Putnam Voyager Fund is designed for investors agressively seeking
capital appreciation through common stocks.
<TABLE>
<CAPTION>
SEMIANNUAL RESULTS AT A GLANCE
-----------------------------------------------------------------------
CLASS A CLASS B
TOTAL RETURN: NAV POP NAV CDSC
<S> <C> <C> <C> <C>
(change in value during period
plus reinvested distributions)
6 months ended 1/31/95 7.90% 1.72% 7.42% 2.42%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS M
SHARE VALUE: NAV POP NAV NAV POP
<S> <C> <C> <C> <C> <C>
7/31/94 $11.19 $11.87 $10.97 -- --
12/1/94 -- -- -- $11.79 $12.22
1/31/95 11.55 12.25 11.26 11.54 11.96
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM
DISTRIBUTIONS: NO. INCOME CAPITAL GAINS TOTAL
<S> <C> <C> <C> <C>
Class A 1 -- $0.508 $0.508
Class B 1 -- 0.508 0.508
Class M 1 -- 0.508 0.508
</TABLE>
Performance data represent past results and will differ for each share class.
For performance over longer periods, see page 8. POP assumes 5.75% maximum
sales charge for class A shares and 3.50% for class M shares. CDSC assumes 5%
maximum contingent deferred sales charge. Performance for class M shares,
which became effective 12/1/94, is not shown because of the brevity of the
reporting period.
* Lipper Analytical Services is an independent research organization; rankings
vary over time and do not reflect the effects of sales charges. The fund's
class A shares ranked 38 out of 139 capital appreciation funds (top 28%) for
1-year performance, 6 out of 81 for 5-year performance (top 8%), and 1 out of
45 for 10-year performance. Past performance is not indicative of future
results.
2
<PAGE> 3
FROM THE CHAIRMAN
[PHOTO]
(C) Karsh, Ottawa
DEAR SHAREHOLDER:
AS PUTNAM VOYAGER FUND EMBARKS ON THE SECOND HALF OF FISCAL 1995, I
WOULD LIKE TO BRING TO YOUR ATTENTION SOME IMPORTANT CHANGES IN YOUR
FUND'S MANAGEMENT TEAM.
ROLAND GILLIS, FORMERLY MANAGER OF THE TOP-PERFORMING KEYSTONE S-4
FUND, HAS JOINED PUTNAM. HE IS WORKING CLOSELY WITH CURRENT MANAGER
MATTHEW WEATHERBIE ON THE FOUNDATION GROWTH PORTION OF THE FUND'S
PORTFOLIO. ROBERT R. BECK, WHO HAS BEEN WITH PUTNAM SINCE 1989 AND
HAS 28 YEARS OF INVESTMENT EXPERIENCE, HAS ALSO JOINED THE VOYAGER
TEAM.
THESE CHANGES REFLECT THE FACT THAT AFTER MORE THAN 11 YEARS, MATT
WILL STEP ASIDE AS PUTNAM VOYAGER'S LEAD MANAGER IN LATE-APRIL. AT
THAT TIME, ROLAND, BOB, AND CHARLES SWANBERG, WHO HAS BEEN
CO-MANAGING THE FUND WITH MATT SINCE LAST YEAR, WILL ASSUME FULL
RESPONSIBILITY FOR DAY-TO-DAY MANAGEMENT OF THE FUND.
WITH THE TALENT AND EXPERTISE OF THIS EXPANDED TEAM, I AM CONFIDENT
THAT PUTNAM VOYAGER WILL RETAIN ITS INVESTMENT "PERSONALITY" AND
THAT IT WILL CONTINUE TO OFFER YOU AN ATTRACTIVE STRATEGY
FOR PURSUING LONG-TERM CAPITAL GROWTH.
RESPECTFULLY YOURS,
SIGNATURE OF GEORGE PUTNAM
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
MARCH 15, 1995
(c) Copyright
3
<PAGE> 4
REPORT FROM THE FUND MANAGERS
MATTHEW WEATHERBIE, LEAD MANAGER
CHARLES SWANBERG
ROBERT R. BECK
Putnam Voyager Fund experienced a period of strong performance over
the six months ended January 31, l995. Despite continually rising
interest rates -- which usually have an adverse effect on stock
prices -- the fund generated a total return of 7.90% for class A
shares and 7.42% for class B shares, both at net asset value (NAV).
These returns significantly outpaced the performance of the stock
market; over the same period, the Standard & Poor's 500(R) Index
produced a total return of 4.14%. See page 8 for more details.
STRONG CORPORATE EARNINGS BENEFIT
PORTFOLIO HOLDINGS
Although the robust corporate earnings growth we've seen recently
has not generally been reflected in the broader market, many of the
stocks we had selected for the fund's portfolio did, in fact,
appreciate. The resulting strong performance over the past six
months has confirmed the value of our investment philosophy: an
emphasis on individual stock selection, patience, and dedication to
long-term results.
During the period, a number of portfolio stocks rebounded from the
severe declines sustained in the summer of 1994. The recoveries
occurred as it became clear that our reasons for purchasing these
stocks -- strong earnings prospects, healthy balance sheets,
attractive product lines, and solid managements -- were attracting
an increasing number of investors.
Your fund's sector weightings changed only slightly over this
period. More than 50% of the portfolio remains invested in
foundation growth stocks -- stocks of small and medium-sized rapidly
growing firms we consider tomorrow's blue chips. We believe these
companies have the potential to provide high returns on invested
capital. We have concentrated primarily on five sectors --
technology, consumer, media, services, and
4
<PAGE> 5
health care. One favored foundation growth holding is Healthsource,
a well-managed health maintenance organization (HMO), which provides
high-quality health care while tightly controlling costs.
Healthsource has grown by entering new regional markets where HMO
penetration has been low.
Opportunity stocks -- stocks of undervalued companies that are
undergoing positive changes -- made up 24% of the portfolio at the
end of the period. The fund's investments in opportunity stocks were
concentrated in consumer staples, publishing, specialty retailers,
financial services, and technology.
Dow Jones & Company is one of the stocks we hold in this category.
Best known for its flagship product, The Wall Street Journal, the
company has also carved a successful niche for itself in the
electronic publishing industry and now provides real-time investment
data to a growing audience of financial-market participants.
Although Dow Jones's stock price was lower at the end of the period
than it was in l987, we believe this price does not reflect the
company's current potential for increased earnings growth.
ADAPTING TO SIGNIFICANT CHANGE
Over the past several years, your fund has evolved from a relatively
small capital appreciation fund to a large fund with more than $4.8
billion in assets. To accommodate this growth, we have expanded the
fund's investment universe while continuing to use the same highly
selective criteria that have proved effective thus far. Foundation
and opportunity stocks still make up most of the portfolio's
holdings. However, a significant portion of your fund's assets --
about 20% as of
<TABLE>
TOP INDUSTRY SECTORS*
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Services 22.2%
Technology 19.0%
Consumer 16.5%
Health Care 13.4%
Media 9.5%
* Based on net assets as of 1/31/95. Holdings will vary over time.
--------------------------------------------------------------------
</TABLE>
5
<PAGE> 6
January 31, l995 -- are now being invested in the stocks of midsize
and large well-established companies.
These stocks, known as "premier growth stocks," are similar to
foundation growth stocks, but are stocks of companies that are at a
more mature stage of business and economic development. In many
cases, we have followed these companies from their infancy through
their rapid growth phase to maturity. While premier growth stocks
generally appreciate at a moderately slower pace than foundation
growth stocks, these companies have above-average growth rates,
substantial business franchises, and financial strength. We believe
their stocks are an important component of the portfolio.
FINDING GROWTH OVERSEAS
Our research into premier growth stocks has taken us beyond U.S.
borders. As the economies of many highly industrialized countries
gained strength, we uncovered a number of overseas companies that
met our standards for strong fundamentals and growth potential. At
the close of the reporting period, nearly 4% of fund assets were
invested in foreign companies in the premier growth category.
One such holding is SAP Software, a German company that is the world
leader in providing financial applications software to large
companies that are moving away from mainframe computing and toward
client-server computing. By using client-server systems, companies
can distribute information throughout their organizations through
desktop computers or through computers in regional locations.
OUTLOOK: A FUNDAMENTALLY SOUND
INVESTMENT CLIMATE
While interest rates could move higher over the next few months, we
believe most of the interest rate increases are behind us. Even
though slightly higher rates could trigger a short-term pullback in
stock prices, we are optimistic about the near-term prospects for
your fund. In our opinion, the stock price appreciation we saw over
the past six months still does not truly reflect the earnings growth
of many of the
6
<PAGE> 7
TOP 10 HOLDINGS AS OF 1/31/95
--------------------------------------------------------------------
H & R BLOCK, INC.
TAX PREPARATION AND ON-LINE SERVICES
TELECOMMUNICATIONS, INC.
OPERATES CABLE TELEVISION SYSTEMS
FLIGHT SAFETY INTERNATIONAL INC.
TRAINING FOR AIRCRAFT OPERATORS
TELEPHONE & DATA SYSTEMS, INC.
PROVIDES LOCAL TELEPHONE SERVICES IN MANY STATES
CENTURY TELEPHONE ENTERPRISES
TELEPHONE AND CELLULAR SERVICES PROVIDER
INTERPUBLIC GROUP
OPERATES ADVERTISING AGENCIES
FIRST DATA CORP.
PROVIDES INFORMATION PROCESSING SYSTEMS
LIN BROADCASTING CORP.
OWNS INTEREST IN CELLULAR PHONE SYSTEMS
DANKA BUSINESS SYSTEMS ADR
OFFICE EQUIPMENT SERVICES
HOME DEPOT
RETAILS BUILDING AND HOME IMPROVEMENT MATERIALS
These holdings represent 17.7% of the fund's net assets. Portfolio
holdings will vary over time.
--------------------------------------------------------------------
companies we follow. In other words, the strength and fundamentals
are there. Given more hospitable market conditions, we should see
even stronger performance over the remainder of fiscal l995.
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 January 31, 1995, there is no
guarantee the fund will continue to hold these securities in the
future.
7
<PAGE> 8
PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions back into the fund. We show
total return in two ways: on a cumulative long-term basis and on
average how the fund might have grown each year over varying
periods. For comparative purposes, we show how the fund performed
relative to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDING 1/31/95
<TABLE>
<CAPTION>
CLASS A CLASS B STANDARD & POOR'S 500
NAV POP NAV CDSC Index CPI
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 months 7.90% 1.72% 7.42% 2.42% 4.14% 1.28%
------------------------------------------------------------------------------
1 year -1.83 -7.48 -2.61 -7.27 0.55 2.80
------------------------------------------------------------------------------
5 years 114.16 101.72 -- -- 66.70 17.98
Annual average 16.45 15.07 -- -- 10.76 3.36
------------------------------------------------------------------------------
10 years 366.12 339.37 -- -- 263.87 42.46
Annual average 16.64 15.95 -- -- 13.79 3.60
------------------------------------------------------------------------------
Life of class B 37.77 34.77 22.68 7.74
Annual average 12.31 11.42 7.69 2.74
------------------------------------------------------------------------------
</TABLE>
TOTAL RETURN FOR PERIODS ENDING 12/31/94
(most recent calendar quarter)
<TABLE>
<CAPTION>
CLASS A CLASS B
NAV POP NAV CDSC
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year 0.44% -5.32% -0.31% -5.07%
---------------------------------------------------------------------------------
5 years 90.64 79.64 -- --
Annual average 13.77 12.43 -- --
---------------------------------------------------------------------------------
10 years 424.69 394.42 -- --
Annual average 18.03 17.33 -- --
---------------------------------------------------------------------------------
Life of class B -- -- 37.65 34.65
Annual average -- -- 12.66 11.74
---------------------------------------------------------------------------------
</TABLE>
Fund performance data do not take into account any adjustment for
taxes payable on reinvested distributions or, for class A shares,
distribution fees prior to implementation of the class A
distribution plan in 1990. Effective 4/27/92, the fund began
offering class B shares, and on 12/1/94, class M shares. Performance
of share classes will differ; performance for class M shares is not
shown because of the brevity of the reporting period. Performance
data represent past results. Investment returns and net asset value
will fluctuate so an investor's shares, when sold, may be worth more
or less than their original cost.
8
<PAGE> 9
TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
CLASS M SHARES have a lower initial sales charge and a higher 12b-1
fee than class A shares and no sales charge on redemption.
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus
any liabilities, divided by the number of outstanding shares, not
including any initial or contingent deferred sales charge.
PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share plus
the maximum sales charge levied at the time of purchase. POP
performance figures shown here assume the maximum 5.75% sales charge
for class A shares and 3.50% for class M shares.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the
time of the redemption of class B shares and assumes redemption at
the end of the period. Your fund's CDSC declines from a 5% maximum
during the first year to 1% during the sixth year. After the sixth
year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
STANDARD & POOR'S 500 INDEX is an unmanaged list of common stocks
that is frequently used as a general measure of stock market
performance. The index assumes reinvestment of all distributions and
does not take into account brokerage commissions or other costs. The
fund's portfolio contains securities that do not match those in the
index.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation;
it does not represent an investment return.
9
<PAGE> 10
PUTNAM FAMILY OF FUNDS
<TABLE>
<C> <C>
PUTNAM GROWTH FUNDS Income Fund
Asia Pacific Growth Fund U.S. Government Income Trust
Capital Appreciation Fund
Diversified Equity Trust PUTNAM TAX-FREE INCOME FUNDS
Europe Growth Fund Intermediate Tax Exempt Fund
Global Growth Fund Municipal Income Fund
Health Sciences Trust Tax Exempt Income Fund
Investors Fund Tax-Free High Yield Fund
Natural Resources Fund* Tax-Free Insured Fund
New Opportunities Fund
OTC Emerging Growth Fund STATE TAX-FREE FUNDS+
Overseas Growth Fund Arizona, California, Florida, Massachusetts, Michigan,
Vista Fund Minnesota, New Jersey, New York,
Voyager Fund Ohio, and Pennsylvania
PUTNAM GROWTH AND INCOME FUNDS LIFESTAGE(SM) FUNDS
Convertible Income-Growth Trust Putnam Asset Allocation Funds--three investment portfolios
Dividend Growth Fund that spread your money across
Equity Income Fund a variety of stocks, bonds,
The George Putnam Fund of Boston and money market investments to help maximize
The Putnam Fund for Growth and Income your return and reduce your risk.
Growth and Income Fund II
Managed Income Trust The three portfolios:
Utilities Growth and Income Fund Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
PUTNAM INCOME FUNDS Putnam Asset Allocation: Growth Portfolio
Adjustable Rate U.S. Government Fund
American Government Income Fund MOST CONSERVATIVE INVESTMENTS++
Balanced Government Fund PUTNAM MONEY MARKET FUNDS:
Preferred Income Trust Money Market Fund(ss)
Diversified Income Trust Tax Exempt Money Market Fund
Federal Income Trust
Global Governmental Income Trust CDS AND SAVINGS ACCOUNTS**
High Yield Advantage Fund * Formerly Energy-Resources Trust.
High Yield Trust + Not available in all states.
++ Relative to above.
Please call your financial advisor or Putnam to ss Formerly Daily Dividend Trust.
obtain a prospectus for any Putnam fund. It ** Not offered by Putnam Investments. Certificates
contains more complete information, including of deposit offer a fixed rate of return
charges and expenses. Read it carefully before and may be insured, up to certain limits,
you invest or send money. by federal/state agencies. Savings accounts may also
be insured up to certain limits.
</TABLE>
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS OWNED
January 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS (87.6%)*
NUMBER OF SHARES VALUE
ADVERTISING (0.4%)
- -----------------------------------------------------------------------------
<C> <S> <C>
392,000 Omnicom Group $ 19,698,000
AEROSPACE (2.7%)
- -----------------------------------------------------------------------------
2,929,330 Flight Safety International, Inc. 109,849,875
784,200 GenCorp Inc. 9,998,550
195,600 Textron, Inc. 10,097,850
------------
129,946,275
ALCOHOLIC BEVERGAGES (0.2%)
- -----------------------------------------------------------------------------
313,600 Seagram Co. Ltd. 9,016,000
APPAREL (0.2%)
- -----------------------------------------------------------------------------
392,200 Tommy Hilfiger 7,991,075
AUTOMOTIVE (0.4%)
- -----------------------------------------------------------------------------
215,100 General Motors Corp. 8,335,125
294,000 Snap-On Inc. 9,297,750
------------
17,632,875
BANKS (1.0%)
- -----------------------------------------------------------------------------
333,300 Banc One Corp. 9,832,350
332,800 Bank of Boston Corp. 9,318,400
150,000 BankAmerica Corp. 6,468,750
110,000 Citicorp 4,468,750
215,300 First Fidelity Bancorp 10,172,925
352,700 National City Corp. 9,346,550
------------
49,607,725
BROADCASTING (2.7%)
- -----------------------------------------------------------------------------
75,000 CBS Inc. 4,378,125
506,635 Clear Channel Communications, Inc. + 25,711,726
1,550,860 Infinity Broadcasting Corp. Class A + 49,433,663
416,620 LIN Television Corp. + 10,806,081
784,200 Renaissance Communications Corp. + 22,153,650
1,841,400 Westwood One, Inc. 17,953,650
------------
130,436,895
BUSINESS EQUIPMENT AND SERVICES (11.8%)
- -----------------------------------------------------------------------------
881,690 Airgas, Inc. + 21,160,560
245,700 Antec Corp. + 4,115,475
4,252,780 Block (H & R), Inc. 152,036,868
2,286,844 Danka Business Systems ADR 54,026,690
330,000 First USA, Inc. 11,385,000
398,190 ITEL Corp. + 13,986,424
391,876 Interim Services, Inc. + 9,160,102
2,104,134 Interpublic Group of Cos., Inc. 70,751,506
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES VALUE
BUSINESS EQUIPMENT AND SERVICES (continued)
- -----------------------------------------------------------------------------
<C> <S> <C>
489,840 Kelly Services, Inc. Class A $ 14,695,200
1,269,820 Loewen Group, Inc. 35,554,960
1,775,220 Manpower, Inc. 45,268,110
2,043,727 Office Depot, Inc. + 53,136,902
196,000 Officemax, Inc. + 5,096,000
722,665 Olsten Corp. (The) 23,938,278
947,525 Paychex, Inc. 36,953,475
784,300 Robert Half International, Inc. + 18,234,975
176,300 Tandy Corp. 7,801,275
------------
577,301,800
BUSINESS SERVICES (0.2%)
- -----------------------------------------------------------------------------
294,000 Dow Jones & Co., Inc. + 9,628,500
CABLE TELEVISION (5.2%)
- -----------------------------------------------------------------------------
431,770 Cablevision Systems Corp. Class A + 22,344,098
1,565,645 Century Communications Corp. Class A 11,938,043
3,327,442 Comcast Corp. Special Class A 49,911,630
370,910 Gaylord Entertainment Co. 8,623,658
1,025,515 TCA Cable TV, Inc. 22,945,898
5,778,647 Tele-Communications Inc. Class A + 122,796,249
324,505 Viacom, Inc. Class B + 14,967,793
------------
253,527,369
CELLULAR COMMUNICATIONS (4.1%)
- -----------------------------------------------------------------------------
937,033 Airtouch Communications, Inc. + 25,768,408
603,080 Cellular Communications of Puerto Rico, Inc. + 18,695,480
363,000 Cellular Communications, Inc. Class A + 18,240,750
404,980 LIN Broadcasting Corp. 56,292,220
1,482,980 Paging Network, Inc. + 50,421,320
1,122,900 Vanguard Cellular Systems, Inc. + 28,353,225
------------
197,771,403
CHEMICALS (1.1%)
- -----------------------------------------------------------------------------
146,900 FMC Corp. + 8,501,838
370,000 Great Lakes Chemical Corp. 21,043,750
563,083 Schulman (A.), Inc. 15,907,095
353,200 Witco Chemical Corp. 9,271,500
------------
54,724,183
COMPUTER PERIPHERALS (0.4%)
- -----------------------------------------------------------------------------
391,400 American Power Conversion Corp. + 6,115,625
587,900 Cognex Corp. + 12,492,875
------------
18,608,500
COMPUTER SERVICES (2.0%)
- -----------------------------------------------------------------------------
741,400 America Online, Inc. + 40,406,300
1,180,400 First Data Corp. 59,462,650
------------
99,868,950
</TABLE>
12
<PAGE> 13
COMMON STOCKS
NUMBER OF SHARES VALUE
<TABLE>
<CAPTION>
COMPUTER SOFTWARE (3.3%)
- -----------------------------------------------------------------------------
<C> <S> <C>
1,117,000 Cisco Systems, Inc. + $ 37,279,875
196,000 Computer Associates International, Inc. 9,775,500
26,200 Electronic Arts + 468,325
294,410 FTP Software, Inc. + 8,206,679
700,660 Lotus Development Corp. + 31,266,953
117,700 Netmanage, Inc. + 4,487,313
1,227,300 Novell, Inc. + 21,784,575
392,380 PeopleSoft, Inc. + 12,703,303
490,000 Platinum Software Corp. + 4,410,000
337,800 PLATINUM Technology Inc. + 7,009,350
196,000 Pyxis Corp. + 3,773,000
222,890 Sybase, Inc. + 9,695,715
257,900 Wall Data, Inc. + 9,413,350
------------
160,273,938
COMPUTERS (0.4%)
- -----------------------------------------------------------------------------
254,800 Compaq Computer Corp. 9,109,100
587,200 EMC Corp. + 10,936,600
------------
20,045,700
CONSUMER PRODUCTS (1.0%)
- -----------------------------------------------------------------------------
588,100 Cardinal Health, Inc. 27,126,113
445,700 Newell Co. 10,028,250
215,500 Walgreen Co. 10,236,250
------------
47,390,613
CONSUMER SERVICES (1.0%)
- -----------------------------------------------------------------------------
1,062,340 CUC International, Inc. + 36,783,523
117,500 Capital Cities/ABC, Inc. 9,752,500
------------
46,536,023
CONTAINERS (0.4%)
- -----------------------------------------------------------------------------
479,800 Bemis Inc. 12,054,975
784,070 Owens-Illinois, Inc. + 8,134,726
------------
20,189,701
ELECTRIC UTILITIES (0.1%)
- -----------------------------------------------------------------------------
489,100 Huaneng Power International, Inc. ADR 6,297,163
ELECTRONICS AND ELECTRICAL EQUIPMENT (2.5%)
- -----------------------------------------------------------------------------
587,250 Baldor Electric Co. 15,782,344
392,180 DSC Communications Corp. + 12,598,783
294,100 General Instrument Corp. + 8,014,225
196,000 Grainger (W.W.), Inc. 11,686,500
215,300 Illinois Tool Works, Inc. 8,665,825
166,400 Motorola, Inc. 9,838,400
294,200 Stratacom, Inc. + 10,517,650
739,500 Xilinx Inc. + 42,706,125
------------
119,809,852
ENTERTAINMENT (-%)
- -----------------------------------------------------------------------------
153,447 National Gaming Corp. + 1,457,747
</TABLE>
13
<PAGE> 14
COMMON STOCKS
NUMBER OF SHARES VALUE
<TABLE>
<CAPTION>
FINANCE (2.5%)
- -----------------------------------------------------------------------------
<C> <S> <C>
403,600 Federal Home Loan Mortgage. Corp. $ 22,601,600
330,357 Federal National Mortgage Association 23,620,526
433,300 Financial Federal Corp. + 8,232,700
294,000 Greentree Acceptance, Inc. 9,297,750
47,000 Household International, Inc. 1,909,375
955,759 MBNA Corp. 24,371,855
343,400 Morgan (J.P.) & Co., Inc. 21,634,200
293,800 Student Loan Marketing Assn. 10,980,775
------------
122,648,781
FOOD AND BEVERAGES (0.9%)
- -----------------------------------------------------------------------------
547,000 Coca-Cola Co. 28,717,500
274,200 IBP., Inc. 8,191,725
3,451,310 Iceland Group 8,394,966
------------
45,304,191
HEALTH CARE AND HMOS (1.0%)
- -----------------------------------------------------------------------------
798,040 Healthsource, Inc. + 34,116,210
489,800 Sierra Health Services + 14,877,675
------------
48,993,885
HEALTH CARE INFORMATION SYSTEMS (0.1%)
- -----------------------------------------------------------------------------
196,060 HBO & Co. 6,984,638
HEALTH CARE SERVICES (6.5%)
- -----------------------------------------------------------------------------
353,200 Amgen, Inc. + 22,472,350
244,000 Biomet, Inc. + 3,690,500
235,200 Columbia/HCA Healthcare Corp. 9,437,400
50,000 Coram Healthcare Corp. + 1,068,750
978,865 Health Management Associates, Inc. + 26,918,788
391,810 Homedco Group, Inc. + 16,235,627
370,655 Horizon Healthcare Corp. + 9,822,358
1,465,750 Lincare Holdings, Inc. + 38,109,500
685,800 Mid Atlantic Medical Services, Inc. + 16,287,750
391,910 Oxford Health Plans Inc. + 33,263,361
586,915 Pacificare Health Systems, Inc. Class B + 37,856,018
588,500 Renal Treatment Centers, Inc. + 12,947,000
284,300 Rotech Medical Corp. 7,818,250
312,480 Target Therapeutics, Inc. + 10,155,600
489,800 United Healthcare Corp. 23,755,300
465,730 Value Health, Inc. + 17,057,361
1,027,950 Vencor, Inc. + 31,352,475
------------
318,248,388
HOUSEHOLD PRODUCTS (0.2%)
- -----------------------------------------------------------------------------
299,100 Blyth Industries, Inc. + 8,412,188
INSURANCE (3.6%)
- -----------------------------------------------------------------------------
107,700 American International Group, Inc. 11,214,263
599,580 Bankers Life Holding Corp. 12,366,338
195,990 Cincinnati Financial Corp. 10,117,984
294,300 EXEL Ltd. 11,551,275
589,589 Gallagher (Arthur J.) & Co. 20,119,725
267,210 General RE Corp. 34,503,491
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES VALUE
INSURANCE (continued)
- -----------------------------------------------------------------------------
<C> <S> <C>
783,500 Life Partners Group, Inc. $ 16,355,563
4,207,880 Rentokil Group 14,754,931
391,900 Transatlantic Holdings Inc. 21,554,500
646,100 USF&G Corp. 9,691,500
352,800 Zurich Reinsurance Centre Holdings, Inc. + 10,231,200
------------
172,460,770
LODGING (1.5%)
- -----------------------------------------------------------------------------
1,881,280 Hospitality Franchise System, Inc. 52,675,840
979,950 La Quinta Inns, Inc. 19,231,519
------------
71,907,359
MEDICAL EQUIPMENT AND SUPPLIES (2.5%)
- -----------------------------------------------------------------------------
1,756,420 Boston Scientific Corp. + 32,493,770
518,302 Haemonetics Corp. + 7,709,742
175,000 Johnson & Johnson 10,171,875
901,660 Medtronic, Inc. 53,536,063
195,690 Sofamor/Danek Group, Inc. + 3,155,501
391,890 Stryker Corp. 15,773,573
------------
122,840,524
OIL AND GAS (2.3%)
- -----------------------------------------------------------------------------
235,200 Burlington Resources Inc. + 8,114,400
320,900 Coflexip (ADR) 7,862,050
147,000 Exxon Corp. 9,187,500
107,800 Mobil Corp. 9,311,225
1,161,400 Petro Geo-Services AS ADR + 25,986,325
510,000 Production Operators Corp. 11,475,000
176,400 Royal Dutch Petroleum Co. ADR 19,734,750
200,000 Schlumberger Limited 10,550,000
293,800 Total Corp. ADS 8,336,575
------------
110,557,825
PAPER (0.4%)
- -----------------------------------------------------------------------------
149,200 Alco Standard Corp. 9,586,100
254,800 Weyerhaeuser Co. 9,650,550
------------
19,236,650
PARCEL DELIVERY SERVICE (0.2%)
- -----------------------------------------------------------------------------
146,700 Federal Express Corp. + 8,912,025
PHARMACEUTICALS AND BIOTECHNOLOGY (3.2%)
- -----------------------------------------------------------------------------
330,000 Abbott Laboratories 11,673,750
1,085,300 Astra AB 27,461,997
293,390 Biogen, Inc. + 10,672,061
700,000 Elan Corp., PLC ADR 24,675,000
241,420 Genzyme Corp. + 8,510,055
440,134 ICN Pharmaceuticals, Inc. 8,252,517
156,600 Lilly (Eli) & Co. 10,316,025
533,500 Pfizer, Inc. 43,613,625
274,200 Upjohn Co. 9,219,975
------------
154,395,005
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES VALUE
PHOTOGRAPHY (0.2%)
- -----------------------------------------------------------------------------
<C> <S> <C>
220,000 Eastman Kodak Co. $ 10,780,000
PUBLISHING (1.0%)
- -----------------------------------------------------------------------------
700,000 Reuters Holdings PLC ADR 29,312,500
259,430 Wolters Kluwer N.V. 19,159,684
------------
48,472,184
RECREATION (0.3%)
- -----------------------------------------------------------------------------
430,600 Mirage Resorts, Inc. + 9,634,675
627,100 Rio Hotel & Casino, Inc. + 7,211,650
------------
16,846,325
RESTAURANTS (2.3%)
- -----------------------------------------------------------------------------
195,600 Apple South, Inc. 2,322,750
1,172,900 Applebee's International, Inc. 20,012,606
489,915 Brinker International, Inc. + 8,634,752
1,040,173 Buffets, Inc. + 10,141,687
1,804,225 J.D. Wetherspoon PLC 13,308,505
721,058 McDonald's Corp. 23,524,517
892,165 Outback Steakhouse, Inc. + 23,642,373
63,700 Papa Johns International, Inc. + 2,054,325
800,200 Taco Cabana, Inc. + 6,051,513
------------
109,693,028
RETAIL (5.6%)
- -----------------------------------------------------------------------------
731,286 Albertsons, Inc. 21,755,759
392,400 AnnTaylor + 13,145,400
978,600 Bed Bath & Beyond, Inc. + 26,177,550
69,561 Castorama Dubois Investisse 9,333,605
676,820 Gymboree Corp. + 16,243,680
981,750 Heilig-Meyers Co. 25,034,625
1,150,300 Home Depot, Inc. (The) 53,776,520
135,830 Hornbach Holding 13,761,141
480,674 Lowes Cos., Inc. 17,664,770
5,372,900 Next PLC 21,385,754
442,950 Stein Mart, Inc. + 5,869,088
765,400 Sunglass Hut International + 17,795,550
392,400 Talbots, Inc. 11,919,150
392,000 The Sports Authority, Inc. + 6,909,000
451,800 Tiffany & Co. New 13,158,675
------------
273,930,267
SEMICONDUCTORS (2.7%)
- -----------------------------------------------------------------------------
50,000 Altera Corp. + 2,225,000
1,297,050 Analog Devices Inc. 27,886,575
583,246 Linear Technology Corp. 28,870,677
1,718,150 Maxim Integrated Products Inc. + 49,826,350
490,200 National Semiconductor Corp. + 8,946,150
136,900 Texas Instruments, Inc. 9,446,100
177,145 Zilog Inc. + 5,137,205
------------
132,338,057
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES VALUE
SPECIALTY CONSUMER PRODUCTS (1.9%)
- -----------------------------------------------------------------------------
<C> <S> <C>
916,652 Department 56, Inc. + $ 33,572,380
490,060 Fastenal Co. 21,041,951
146,000 Gillette Co. (The) 11,223,750
254,200 Harcourt General, Inc. 8,483,925
576,520 Luxottica Group ADS 19,817,875
--------------
94,139,881
STEEL (0.8%)
- -----------------------------------------------------------------------------
559,200 Nucor Corp. 28,519,200
588,420 Worthington Industries, Inc. 11,768,400
--------------
40,287,600
TELEPHONE SERVICES (5.2%)
- -----------------------------------------------------------------------------
886,280 ALC Communications Corp. + 25,702,120
2,848,335 Century Telephone Enterprises, Inc. 89,722,553
391,400 LDDS Communications, Inc. + 8,512,950
200,000 MCI Communications Corp. 3,675,000
464,653 MFS Communications Company, Inc. + 17,656,814
370,000 Sprint Corp. 10,545,000
2,161,840 Telephone & Data Systems, Inc. 94,580,500
--------------
250,394,937
TELEPHONE UTILITIES (0.6%)
- -----------------------------------------------------------------------------
333,600 ALLTEL Corp. 9,465,900
449,800 Southwestern Bell Corp. 19,172,725
--------------
28,638,625
TEXTILES (0.3%)
- -----------------------------------------------------------------------------
391,900 St. John Knits, Inc. 12,393,838
TOBACCO (0.7%)
- -----------------------------------------------------------------------------
1,148,400 UST Inc. 33,877,800
TOTAL COMMON STOCKS (cost $ 3,739,404,481) $4,260,455,058
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS (0.9%)*
(cost $ 24,876,059)
NUMBER OF SHARES VALUE
<C> <S> <C>
880,900 Cellular Communications, Inc. $0.01 cv., pfd. $ 44,265,225
PREFERRED STOCKS (0.5%)* (cost $ 17,779,924)
NUMBER OF SHARES VALUE
35,290 Sap Ag Systeme Preference Bearer $ 22,192,205
CONVERTIBLE BONDS (0.1%)* (cost $ 6,837,500)
NUMBER OF SHARES VALUE
6,800,000 ICN Pharmaceuticals cv. deb. 81/2s 11/15/1999 $ 6,732,000
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
WARRANTS (-%)+(cost $---)
NUMBER OF WARRANTS EXPIRATION DATE VALUE
<C> <S> <C> <C>
10,673 Jan Bell Marketing, Inc. 12/16/98 $ 672
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (9.9%)*
PRINCIPAL AMOUNT VALUE
<C> <S> <C>
27,433,000 Bell Atlantic Financial Services, Inc.
5.8s, February 23, 1995 $ 27,340,185
30,000,000 Federal Home Loan Banks 5.6s, February 9, 1995 29,962,667
40,000,000 Federal Home Loan Banks 5.83s, February 7, 1995 39,961,134
30,000,000 Federal Home Loan Mortgage Corp. 5.5s,
February 7, 1995 29,977,084
40,000,000 Federal Home Loan Mortgage Corp. 5.6s,
February 9, 1995 39,950,222
100,000,000 Federal National Mortgage Assn. 5.6s,
February 21,1995 99,681,111
28,000,000 Federal National Mortgage Association
5.92s, March 8, 1995 27,838,844
22,000,000 General Electric Capital Corp. 5.82s,
February 23, 1995 21,918,197
25,000,000 Heller Financial Inc. 5.88s, February 2, 1995 24,991,833
40,000,000 Morgan (J.P.) & Co. Inc. 5.80s, February 21, 1995 39,864,668
35,000,000 Preferred Receivables Funding Corp.
5.87s, February 27, 1995 34,845,912
22,605,000 Preferred Receivables Funding Corp.
5.8s, February 7, 1995 22,579,506
15,000,000 Sears Roebuck Accept Corp. 5.93s,
February 9, 1995 14,980,233
29,836,000 Interest in $605,000,000 joint repurchase agreement
dated January 31, 1995 with Goldman Sachs, due
February 1, 1995 with respect to various U.S.
Treasury Obligations -- maturity value of
$29,840,740 for an effective yield of 5.72% 29,840,740
--------------
TOTAL SHORT-TERM INVESTMENTS (cost $ 314,411,375) $ 483,732,336
--------------
TOTAL INVESTMENTS *** (cost $ 4,103,309,339) $4,817,377,496
==============
</TABLE>
NOTES
---------------------------------------------------------------------------
* Percentages indicated are based on total net assets of $4,864,758,268,
which correspond to a net asset value per Class A, Class B and Class M
share of $11.19, $10.97, and $11.54, respectively.
***The aggregate identified cost for federal income tax purposes is
$4,111,353,931 resulting in gross unrealized appreciation and depreciation
of $842,700,090 and $136,676,525, respectively, or net unrealized
appreciation of $706,023,565.
+ Non-income-producing security.
ADR or ADS after the name of a foreign holding stands for American
Depository Receipt or American Depository Shares, respectively,
representing ownership of foreign securities on deposit with a domestic
custodian bank.
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 19
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
----------------------------------------------------------------------------------------------
Investments in securities, at value (identified cost $4,103,309,339) (Note 1) $4,817,377,496
----------------------------------------------------------------------------------------------
Cash 448
----------------------------------------------------------------------------------------------
Dividends, interest and other receivables 2,439,682
----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 29,750,045
----------------------------------------------------------------------------------------------
Receivable for securities sold 44,926,766
----------------------------------------------------------------------------------------------
TOTAL ASSETS 4,894,494,437
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
LIABILITIES
----------------------------------------------------------------------------------------------
Payable for securities purchased 5,153,908
----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 12,988,171
----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 6,328,458
----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,798,567
----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 31,452
----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 1,755,613
----------------------------------------------------------------------------------------------
Other accrued expenses 680,000
----------------------------------------------------------------------------------------------
TOTAL LIABILITIES 29,736,169
----------------------------------------------------------------------------------------------
NET ASSETS $4,864,758,268
----------------------------------------------------------------------------------------------
REPRESENTED BY
----------------------------------------------------------------------------------------------
Paid-in capital (Note 1 and 4) $4,067,084,780
Accumulated net investment loss (Note 1) (2,461,726)
Accumulated net realized gain on investment transactions (Note 1) 86,067,057
Net unrealized appreciation of investments 714,068,157
----------------------------------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES OUTSTANDING $4,864,758,268
----------------------------------------------------------------------------------------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
----------------------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($3,552,912,235 divided by 307,743,326 shares) $11.55
----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $11.55)* $12.25
----------------------------------------------------------------------------------------------
Net asset value and offering price of class B shares
($1,195,476,770 divided by 106,139,766 shares)** $11.26
----------------------------------------------------------------------------------------------
Net asset value and offering price of class Y shares
($115,461,479 divided by 9,966,354 shares)** $11.59
----------------------------------------------------------------------------------------------
Net asset value and redemption price of class M shares
($907,791 divided by 78,652 shares)** $11.54
----------------------------------------------------------------------------------------------
Offering price per class M shares (100/96.50 of $11.54) $11.96
----------------------------------------------------------------------------------------------
</TABLE>
* On single retail sales of less than $50,000. On sales of
$50,000 or more 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.
19
<PAGE> 20
STATEMENT OF OPERATIONS
Six months ended January 31,1995 (Unaudited)
<TABLE>
----------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign tax of $231,634) $ 18,094,553
Interest 7,896,092
----------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 25,990,645
EXPENSES:
----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 12,325,903
----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 5,463,632
----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 52,229
----------------------------------------------------------------------------------------------
Distribution fees-- Class A (Note 2) 4,237,052
----------------------------------------------------------------------------------------------
Distribution fees-- Class B (Note 2) 5,433,303
----------------------------------------------------------------------------------------------
Distribution fees-- Class M (Note 2) 524
----------------------------------------------------------------------------------------------
Reports to shareholders 183,725
----------------------------------------------------------------------------------------------
Auditing 77,062
----------------------------------------------------------------------------------------------
Legal 31,870
----------------------------------------------------------------------------------------------
Postage 313,074
----------------------------------------------------------------------------------------------
Administrative services (Note 2) 26,879
----------------------------------------------------------------------------------------------
Registration fees 242,839
----------------------------------------------------------------------------------------------
Other 95,505
----------------------------------------------------------------------------------------------
Fees waived by Manager (31,226)
----------------------------------------------------------------------------------------------
TOTAL EXPENSES 28,452,371
----------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,461,726)
----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 140,621,056
----------------------------------------------------------------------------------------------
Net realized loss on written options (1,650)
----------------------------------------------------------------------------------------------
Net realized loss on foreign currency translation (10,004)
----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 183,040,500
----------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 323,649,902
----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 321,188,176
----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial
statements.
20
<PAGE> 21
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31* JULY 31
----------------------------------
1995 1994
<S> <C> <C>
INCREASE IN NET ASSETS
-------------------------------------------------------------------------------------
Operations:
-------------------------------------------------------------------------------------
Net investment loss $ (2,461,726) $ (11,101,856)
-------------------------------------------------------------------------------------
Net realized gain on investments, written options
and foreign currency translation 140,609,402 197,390,941
-------------------------------------------------------------------------------------
Net unrealized appreciation of investments 183,040,500 (66,870,273)
-------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 321,188,176 119,418,812
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
-------------------------------------------------------------------------------------
Net realized gain on investments
Class A (145,546,174) (104,366,667)
Class B (49,512,026) (22,949,719)
Class Y (4,827,692) --
Class M (12,706) --
-------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 698,420,874 1,241,253,150
-------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 819,710,452 1,233,355,576
Beginning of year 4,045,048,716 2,811,693,140
-------------------------------------------------------------------------------------
END OF YEAR (including accumulated net investment
loss of $2,461,726 and $0, respectively) $4,864,759,168 $4,045,048,716
-------------------------------------------------------------------------------------
</TABLE>
* Unaudited.
The accompanying notes are an integral part of these financial
statements.
21
<PAGE> 22
FINANCIAL HIGHLIGHTS*
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 1, 1994 APRIL 1, 1994
(COMMENCEMENT OF SIX MONTHS (COMMENCEMENT
OPERATIONS) TO ENDED OF OPERATIONS) TO
JANUARY 31 JANUARY 31 JULY 31
---------------------------------------------------------
1995 1994
---------------------------------------------------------
Class M Class Y
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.79 $11.22 $11.24
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
- --------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) -- .02 --
- --------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments .26 .86 (.02)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .26 .88 (.02)
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
- --------------------------------------------------------------------------------------------------------------------------
Net Investment Income -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments (.51) (.51) --
- --------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.51) (.51) --
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.54 $11.59 $11.22
- --------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE (%) (b) 2.32(c) 7.98(c) (.18)(c)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $908 $115,461 $82,102
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Interest Expense to Average Net Assets (%) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Other Operating Expenses to Average Net Assets (%) .26(c) .51(c) .31(c)
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to Average Net Assets (%) .26(c) .51(c) .31(c)
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average Net Assets (%) (.08)(c) .19(c) (.05)(c)
- --------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 61.29 61.29 57.74
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
APRIL 27, 1992**
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
JANUARY 31 YEAR ENDED JULY 31 JULY 31
--------------------------------------------------------------
1995 1994 1993 1992
--------------------------------------------------------------
Class B
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.97 $10.89 $9.63 $9.34
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (.04) (.05) (.03) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments .84 .59 1.81 .33
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .80 .54 1.78 .29
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments (.51) (.46) (.52) --
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.51) (.46) (.52) --
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.26 $10.97 $10.89 $9.63
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE (%) (b) 7.42(c) 4.71 18.79 3.11(c)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $1,195,477 $911,069 $408,361 $42,492
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Interest Expense to Average Net Assets (%) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Other Operating Expenses to Average Net Assets (%) .92(c) 1.84 1.87 .63(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to Average Net Assets (%) .92(c) 1.84 1.87 .63(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average Net Assets (%) (.35)(c) (.91) (.91) (.39)(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 61.29 57.74 64.62 44.17
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Table has been restated to reflect a 3-for-1 share split declared
by the fund to shareholders of record on October 27, 1989.
** Per share net investment income has been determined on the basis
of weighted average number of shares outstanding during the
period.
(a) Reflects an expense limitation during the year ended July 31,
1988. As a result of such limitation, expenses reflect a
reduction of less than $0.01 per share.
(b) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(c) Not annualized.
23
<PAGE> 24
FINANCIAL HIGHLIGHTS*
(Continued)
<TABLE>
<CAPTION>
Six months
ended
January 31
----------
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.19 $11.02 $9.67 $9.00 $7.98
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) -- (.02) (.02) .02 .02
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain (Loss) on Investments .87 .65 1.89 1.16 1.70
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .87 .63 1.87 1.18 1.72
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income -- -- -- (.03) (.07)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments (.51) (.46) (.52) (.48) (.63)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.51) (.46) (.52) (.51) (.70)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.55 $11.19 $11.02 $9.67 $9.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%) (b) 7.90(c) 5.49 19.69 13.39 24.04
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $3,552,912 $3,051,878 $2,403,332 $1,549,128 $1,016,539
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Interest Expense to
Average Net Assets (%) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Other Operating Expenses
to Average Net Assets (%) .54(c) 1.10 1.12 1.20 1.10
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to Average Net Assets (%) .54(c) 1.10 1.12 1.20 1.10
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (%) .03(c) (.18) (.14) .27 .29
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 61.29 57.74 64.62 44.17 49.43
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 25
<TABLE>
<CAPTION>
1990 1989 1988 1987 1986 1985
- --------------------------------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.51 $6.56 $8.71 $7.43 $6.05 $4.77
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) .09 .08 .04(a) .02 .04 .05
- --------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain (Loss) on Investments .28 2.02 (.84) 2.22 1.71 1.64
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .37 2.10 (.80) 2.24 1.75 1.69
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
- --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (.10) (.02) (.03) (.05) (.05) (.05)
- --------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments (.80) (.13) (1.32) (.91) (.32) (.36)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.90) (.15) (1.35) (.96) (.37) (.41)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.98 $8.51 $6.56 $8.71 $7.43 $6.05
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%) (b) 4.80 32.59 (10.26) 35.71 31.33 37.12
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $755 ,550 $697,248 $549,799 $610,966 $378,532 $282,868
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of Interest Expense to
Average Net Assets (%) -- -- -- .19 .01 .06
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of Other Operating Expenses
to Average Net Assets (%) .97 1.00 1.05(a) 1.01 .88 .96
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of Total Expenses to Average Net Assets (%) .97 1.00 1.05(a) 1.20 .89 1.02
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (%) 1.10 1.04 .68(a) .41 .72 .99
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 61.71 70.87 65.75 79.10 75.57 60.29
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Table has been restated to reflect a 3-for-1 share split declared
by the fund to shareholders of record on October 27, 1989.
** Per share net investment income has been determined on the basis
of weighted average number of shares outstanding during the
period.
(a) Reflects an expense limitation during the year ended July 31,
1988. As a result of such limitation, expenses reflect a
reduction of less than $0.01 per share.
(b) Total investment return assumes dividend reinvestment and
does not reflect the effect of sales charges.
(c) Not annualized.
25
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS
January 31, 1995
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. The fund invests
primarily in common stocks of companies that Putnam Investment Management, Inc.
("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of Putnam
Investments, Inc., believes have potential for capital appreciation
significantly greater than that of the market averages.
The fund offers class A, class B, class M and class Y shares. The fund commenced
its public offering of class M shares on December 1, 1994. Class A shares are
sold with a maximum front-end sales charge of 5.75%. Class B shares do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than Class A
shares, and may be subject to a contingent deferred sales charge, if those
shares are redeemed within six years of purchase. Class M shares are sold with a
maximum front-end sales charge of 3.50% and pay an ongoing distribution fee that
is lower than class B shares and higher than class A shares. Class Y shares,
which do not pay a front end or contingent deferred sales charge are generally
subject to the same expenses as class A, B and M shares, but do not bear a
distribution fee. Class Y shares are sold only to defined contribution plans
with an initial investment of at least $250 million in a combination of Putnam
funds and other investments managed by Putnam. Expenses of the fund are borne
pro-rata by the holders of both classes of shares, except that each class bears
expenses unique to that class including the distribution fees applicable to such
class. Each class votes only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the Trustees.
Shares of each class would receive their pro-rata share of the net assets of the
fund, if the fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A SECURITY VALUATION Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or, if no sales are reported -- as in the case of some
securities traded over the counter -- the last reported bid price, except that
certain U.S. government obligations are stated at the mean between the bid and
asked prices. Short-term investments having remaining maturities of 60 days or
less are stated at amortized cost which approximates market, and other
investments are stated at fair value following procedures approved by the
Trustees.
B JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securities
and Exchange Commission, the fund may transfer uninvested cash balances into a
joint trading account, along with the cash of other registered investment
companies managed by Putnam Management and certain other accounts. These
balances may be
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<PAGE> 27
invested in one or more repurchase agreements and/or short-term money market
instruments.
C REPURCHASE AGREEMENTS The fund, through its custodian, receives delivery of
the underlying securities, the market value of which at the time of purchase is
required to be in an amount at least equal to the resale price, including
accrued interest. The fund's Manager is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security transactions are
accounted for on the trade date (date the order to buy or sell is executed).
Interest income is recorded on the accrual basis and dividend income is recorded
on the ex-dividend date, except that certain dividends from foreign securities
are recorded as soon as the fund is informed of the ex-dividend date. Foreign
currency denominated receivables and payables are "marked-to-market" using the
current exchange rate. The fluctuation between the original exchange rate and
the current exchange rate is recorded as unrealized gain or loss. Upon receipt
of payment, the funds realize a gain or loss on foreign currency amounting to
the difference between the original value and the ending value of the receivable
or payable.
E FEDERAL TAXES It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code of
1986. Therefore, no provision has been made for federal taxes on income, capital
gains or unrealized appreciation on securities held and for excise tax on income
and capital gains.
F DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded by
the fund on the ex-dividend date. 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 for the
quarter. Such fee is based on the following annual rates: 0.70% of the first
$500 million of average net assets, 0.60% of the next $500 million, 0.55% of the
next $500 million, and 0.50% of any amount over $1.5 billion, subject to
reduction in any year to the extent that expenses (exclusive of brokerage,
interest, taxes, distribution fees, credits allowed by PFTC and extraordinary
expenses) of the fund exceed 2.5% of the first $30 million of average net
assets, 2.0% of the next $70 million and 1.5% of any amount over $100 million,
and by the amount of certain brokerage commissions and fees (less expenses)
received by affiliates of the Manager on the fund's portfolio transactions.
The fund also reimburses the Manager for the compensation and related expenses
of certain officers of the fund and their staff who provide administrative
services to the fund. The aggregate amount of all such reimbursements is
determined annually by the Trustees.
Trustees of the fund receive an annual Trustee's fee of $5,650, and an
additional fee for each Trustees' meeting attended. Trustees who are not
inter-
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<PAGE> 28
ested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing
agent functions are provided to the fund by Putnam Investor Services, a division
of PFTC.
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended January 31, 1995 have been reduced by credits allowed
by PFTC.
The fund has adopted a distribution plan with respect to its class A shares (the
"Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The purpose of the Class A Plan is to compensate Putnam Mutual Funds Corp., a
wholly-owned subsidiary of Putnam Investments Inc., for services provided and
expenses incurred by it in distributing class A shares. The Trustees have
approved payment by the fund to Putnam Mutual Funds Corp., at an annual rate of
0.25% of the fund's average net assets attributable to class A shares.
During the six months ended January 31, 1995, Putnam Mutual Funds Corp., acting
as an underwriter, received net commissions of $1,084,997 from the sale of Class
A shares of the fund.
A deferred sales charge of up to 1% is assessed on certain redemptions of Class
A shares purchased as part of an investment of $1 million or more. For the six
months ended January 31, 1995, Putnam Mutual Funds Corp., acting as underwriter,
received $6,543 on class A redemptions.
The fund has adopted a separate distribution plan with respect to its class B
shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The purpose of Class B Plan is to compensate Putnam Mutual Funds
Corp. for services provided and expenses incurred by it in distributing class B
shares. The Class B Plan provides for payments by the fund to Putnam Mutual
Funds Corp. at an annual rate of up to 1.00% of the fund's average net assets
attributable to class B shares.
Putnam Mutual Funds Corp. also receives the proceeds on the contingent deferred
sales charges on its Class B share redemptions within six years of purchase. The
charge is based on declining rates, which begin at 5.00% of the net asset value
of the redeemed shares. For the six months ended January 31, 1995, Putnam Mutual
Funds Corp., acting as an underwriter, received $900,979 in contingent deferred
sales charges from redemptions.
The fund has adopted a separate distribution plan with respect to its class M
shares (the "Class M Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The purpose of the Class M Plan is to compensate Putnam Mutual
Funds Corp., for services and expenses incurred by it in distributing class M
shares. The Trustees have approved payment by the fund to Putnam Mutual Funds
Corp., at an annual rate of 0.75% of the fund's average net assets attributable
to class M shares. For the period December 1, 1994 (commencement of operations)
to January 31, 1995, Putnam Mutual Funds Corp., acting as an underwriter,
received net commissions of $3,240 from the sale of class M shares of the fund.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended January 31, 1995, purchases and sales of investment
securities other than short-term investments aggregated $2,915,962,847 and
$2,578,048,928, respectively. There were no purchases or sales of U.S.
government obligations. In determining the net gain or loss on securities sold,
the cost of securities has been determined on the identified cost basis.
28
<PAGE> 29
<TABLE>
<CAPTION>
<S> <C>
NOTE 4 YEAR ENDED JULY 31, 1994
CAPITAL SHARES ---------------------------------------------
CLASS B SHARES AMOUNT
At January 31, 1995, there was an ---------------------------------------------
unlimited number of shares of benefi- Shares sold 54,297,802 $ 622,475,746
cial interest authorized, divided into ---------------------------------------------
four classes, class A, class B, class Y Shares issued
and class M capital shares. Transactions in connection
in capital shares were as follows: with reinvest-
ment of
distributions 1,839,090 21,241,295
---------------------------------------------
56,136,892 643,717,041
SIX MONTHS ENDED JANUARY 31, 1995
- --------------------------------------------- Shares
CLASS A SHARES AMOUNT repurchased 10,567,655 121,046,605
- --------------------------------------------- ---------------------------------------------
Shares sold 61,247,389 $ 719,560,015 Net increase 45,569,237 $ 522,670,436
- --------------------------------------------- ---------------------------------------------
Shares issued
in connection SIX MONTHS ENDED JANUARY 31, 1995
with reinvest- ---------------------------------------------
ment of CLASS Y SHARES AMOUNT
distributions 12,419,691 138,976,393 ---------------------------------------------
- --------------------------------------------- Shares sold 2,980,509 $ 35,367,593
73,667,080 858,536,408 ---------------------------------------------
Shares issued
Shares in connection
repurchased 38,696,706 455,451,553 with reinvest-
- --------------------------------------------- ment of
Net increase 34,970,706 $ 403,084,855 distributions 430,218 4,826,994
- --------------------------------------------- ---------------------------------------------
3,410,727 40,194,587
Shares
repurchased 764,350 8,978,807
---------------------------------------------
Net increase 2,646,377 $ 31,215,780
YEAR ENDED JULY 31, 1994 ---------------------------------------------
- ---------------------------------------------
CLASS A SHARES AMOUNT YEAR ENDED JULY 31, 1994
- --------------------------------------------- ---------------------------------------------
Shares sold 120,147,917 $1,398,407,256 CLASS Y SHARES AMOUNT
- --------------------------------------------- ---------------------------------------------
Shares issued Shares sold 7,360,249 $ 82,242,284
in connection ---------------------------------------------
with reinvest- Shares issued
ment of in connection
distributions 8,467,321 99,321,439 with reinvest-
- --------------------------------------------- ment of
128,615,238 1,497,728,695 distributions -- --
---------------------------------------------
Shares 7,360,249 82,242,284
repurchased 73,942,159 860,942,051
- --------------------------------------------- Shares
Net increase 54,673,079 $ 636,786,644 repurchased 40,272 446,214
- --------------------------------------------- ---------------------------------------------
Net increase 7,319,977 $ 81,796,070
SIX MONTHS ENDED JANUARY 31, 1995 ---------------------------------------------
- ---------------------------------------------
CLASS B SHARES AMOUNT DECEMBER 1, 1994 (COMMENCEMENT
- --------------------------------------------- OF OPERATIONS) TO JANUARY 31, 1995
Shares sold 26,626,513 $ 306,213,717 ---------------------------------------------
- --------------------------------------------- CLASS M SHARES AMOUNT
Shares issued ---------------------------------------------
in connection Shares sold 82,174 $ 952,640
with reinvest- ---------------------------------------------
ment of Shares issued
distributions 4,230,669 46,198,903 in connection
- --------------------------------------------- with reinvest-
30,857,182 352,412,620 ment of
distributions 1,112 12,448
Shares ---------------------------------------------
repurchased 7,774,922 89,204,741 83,266 965,088
- ---------------------------------------------
Net increase 23,082,260 $ 263,207,889 Shares
- --------------------------------------------- repurchased 4,620 52,738
---------------------------------------------
Net increase 78,666 $ 912,350
---------------------------------------------
</TABLE>
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<PAGE> 30
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested
Service Seal for the past five years. The award is presented
annually by DALBAR Financial Services, an independent firm
that monitors and evaluates the quality of service provided by
mutual fund companies throughout the United States. DALBAR
ranks firms by conducting 12,000 anonymous performance
evaluations based on 38 service components.
HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as
$25 a month from a Putnam fund or from your checking or
savings account.*
SWITCH FUNDS EASILY.
You can move money from one account to another with the same
class of shares without a service charge. (This privilege is
subject to change or termination.)
ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any
business day at the then-current net asset value, which may be
more or less than their original cost.
For details about any of these or other services, contact your
financial advisor or call the toll-free number shown below and
speak with a helpful Putnam representative.
To make an additional investment in this or any other Putnam
fund, contact your financial advisor or call our toll-free
number: 1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or
protect against a loss in a declining market. Investors should
consider their ability to continue purchasing shares during
periods of low price levels.
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<PAGE> 31
FUND INFORMATION
<TABLE>
<S> <C>
INVESTMENT MANAGER Lawrence J. Lasser
Putnam Investment Management, Inc. Vice President
One Post Office Square
Boston, MA 02109 Gordon H. Silver
Vice President
MARKETING SERVICES
Putnam Mutual Funds Corp. Matthew Weatherbie
One Post Office Square Vice President and Fund Manager
Boston, MA 02109
Charles H. Swanberg
CUSTODIAN Vice President and Fund Manager
Putnam Fiduciary Trust Company
Robert R. Beck
LEGAL COUNSEL Vice President and Fund Manager
Ropes & Gray
William N. Shiebler
TRUSTEES Vice President
George Putnam, Chairman
William F. Pounds, Vice Chairman John R. Verani
Jameson Adkins Baxter Vice President
Hans H. Estin
John A. Hill Paul M. O'Neil
Elizabeth T. Kennan Vice President
Lawrence J. Lasser
Robert E. Patterson John D. Hughes
Donald S. Perkins Vice President and Treasurer
George Putnam, III
A.J.C. Smith Beverly Marcus
W. Nicholas Thorndike Clerk and Assistant Treasurer
OFFICERS This report is for the information of
George Putnam shareholders of Putnam Voyager Fund.
President It may also be used as sales literature
when preceded or accompanied by the
Charles E. Porter current prospectus, which gives details
Executive Vice President of sales charges, investment objectives,
and operating policies of the fund and
Patricia C.Flaherty the most recent copy of Putnam's
Senior Vice President Quarterly Performance Summary. For
more information or to request a
prospectus, call toll free 1-800-225-1581.
Shares of mutual funds are not
deposits or obligations of, or guaran-
teed or endorsed by, any financial
institution, are not insured by the
Federal Deposit Insurance Corporation
(FDIC), the Federal Reserve Board or
any other agency, and involve risk,
including the possible loss of principal
amount invested.
</TABLE>
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<PAGE> 32
PUTNAM INVESTMENTS Bulk Rate
U.S. Postage
The Putnam Funds PAID
One Post Office Square Putnam
Boston, Massachusetts 02109 Investments
