Putnam
Voyager
Fund
SEMIANNUAL REPORT
January 31, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Putnam Voyager Fund has delivered strong long-term returns, as
evidenced by rankings of capital appreciation funds tracked by Lipper
Analytical Services. For the 10 years ended January 31, 1998, the fund's
class A shares ranked in the top 9% of Lipper's capital appreciation funds
category, or 5 out of 55 funds.*
* "We see 1998 as a transition year for growth investors as the
market begins to focus on small and midsize stocks that offer
significantly higher growth rates than those of large-cap stocks while
trading at historically low valuations."
-- Roland W. Gillis, manager, Putnam Voyager Fund
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
23 Financial statements
*Lipper rankings are based on total return performance, vary over time,
and do not reflect the effects of sales charges. The fund's class A shares
ranked 13 out of 82 funds (top 16%) for 5-year performance and 89 out of
235 funds (top 38%) for 1-year performance as of 1/31/98. Performance and
rankings of other share classes will differ. Past performance is not
indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
As Putnam Voyager Fund began its new fiscal year last July, both domestic and
international equity markets were still strong overall but somewhat inverted
with old-line conservative stocks outpacing young upstarts. This turnabout had
occurred as investors grew increasingly cautious about the durability of the
aging global bull market. The inversion became even further exaggerated when
last fall's Asian currency crisis sent the world's stock markets reeling.
Defensive actions taken earlier by your fund's management team in response to
the weakness in technology mitigated the negative effects of the late-year
market disruptions on fund results.
I am pleased to report the addition of Michael E. Nance and Michael P. Stack
to the fund's management team. After several years in the consumer-products
industry, Mike Nance joined Putnam in 1994 as an analyst in the Global Equity
Research Group. He has four years of investment management experience. Mike
Stack was with Independence Investment Associates and National Life Investment
Management before joining Putnam in 1997. He has 12 years of investment
experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
March 18, 1998
Report from the Fund Managers
Roland W. Gillis
Charles H. Swanberg
Robert R. Beck
Michael E. Nance
Michael Stack
The final months of 1997 and the start of 1998 showcased a topsy-turvy
atmosphere for the U.S. stock market as investors sorted out the implications
of the Asian financial crisis. Within this difficult environment, Putnam
Voyager Fund -- an all-weather growth fund that targets large, small, and
midsize stocks -- performed relatively well. For the six months ended January
31, 1998, the fund's class A shares provided a total return of 3.98% at NAV
(- 2.01% at public offering price) against the 3.56% return of the Standard &
Poor's 500(registered trademark) Index, an index primarily made up of
large-company stocks. For complete performance information, see pages 9 and
10.
During the period, we attempted to mitigate some of the volatility affecting
one of the fund's primary stock sectors, technology. Additionally, we took
advantage of a strong year for mergers and acquisitions. As always, we sought
companies with strong earnings growth prospects that were well positioned in
attractive growth industries.
* SWITCHING GEARS IN TECHNOLOGY AREA
One of the first changes to become apparent as a result of the Asian situation
was lower prices for commodity semiconductors such as DRAMs (dynamic random
access memories). Lower or devalued currencies in Taiwan, South Korea, and
Japan, the leading producers of these basic digital components, seemed likely
to spike export growth in this area of information technology. For instance,
our decision to reduce the fund's positions in companies such as Applied
Materials proved quite beneficial, as their price declined toward the close of
the period.
We did not abandon the semiconductor industry, however. Instead, we targeted
analog products. This group uses higher-priced components than the digital
group and has less competition from Asian companies. We bought stocks of
several analog companies at attractive prices, including Maxim Integrated
Products, Linear Technology, and Analog Devices. While these holdings, along
with others discussed in this report, were viewed favorably at the end of the
fiscal period, all are subject to review and adjustment in accordance with the
fund's investment strategy and may vary in the future.
* TARGETING COMPANIES ADDRESSING YEAR 2000 PROBLEM
As the end of the century approaches, companies around the world have been
forced to deal with the now well-publicized Year 2000 problem. They are
struggling to prevent the loss of essential data within computer systems that
are not programmed to recognize 00 as the year 2000, mistaking it for the year
1900 instead. However, companies have to consider that the lengthy time needed
to install entirely new systems to deal with the problem is running out.
Therefore, many companies are now seeking firms that will help them test and
fix their current systems. Thus, we began to de-emphasize companies in the
portfolio that provide new systems, focusing instead on those whose solutions
are designed to modify existing systems.
For example, we believe the valuations of companies such as PeopleSoft are
stretched and that this type of firm will begin to lose earnings momentum. On
the other hand, we see great potential in other Year 2000-related companies
such as EMC Corp. EMC produces and supports systems for storing data in
computers and was recently named one of 1997's fastest-growing U.S. technology
companies by the major accounting firm Deloitte & Touche. EMC benefits from
testing for the Year 2000 problem because extra data storage and mainframe
capacity are needed to do testing procedures.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Retail 11.7%
Computer software 9.0%
Pharmaceuticals and Biotechnology 6.2%
Business services 6.4%
Finance 5.0%
Footnote reads:
*Based on net assets as of 1/31/98. Holdings will vary over time.
Mainframe software company Computer Associates International also has taken
advantage of this trend. In addition, the company has enjoyed strong sales
growth for its new product, Unicenter. Finally, Compuware derives a direct
benefit from the Year 2000 problem in that it not only produces the actual
mainframe testing tools but provides testing services as well.
* DEFENSIVE HOLDINGS DELIVER STRONG RETURNS
Over the past six months, we focused on stocks we believed could grow their
earnings despite the changing market. One defensive area represented in the
fund is specialty retailing. Stellar performers included Costco Companies, a
chain of wholesale membership warehouses, and Kohls Corporation, which
operates specialty department stores in the Midwest. Other holdings include
Williams-Sonoma, which enjoyed strong catalog sales, and CompUSA, the
beneficiary of surging sales in the under-$1,000 personal computer market.
With low interest rates, extensive consolidation in the banking industry, and
solid demand for financial services, banking and financial services companies
were strong performers. For example, in 1997, American Express dramatically
increased its share of the U.S. credit-card market, reversing a decade-long
slide. In addition, the company has become more streamlined, getting out of
several businesses in order to focus on credit cards, travel, and financial
services. As a result, American Express stock has outperformed the market.
* CABLE, BROADCASTING, MEDIA OFFER RENEWED VALUE
Although it was passed in 1996, legislation that loosened restrictions on
broadcasters continued to spawn a good deal of merger and acquisition activity
in this sector throughout 1997. Passage of the Telecommunications Act of 1996
allowed for ownership of multiple radio and television stations, which boosted
the value of many broadcasting companies poised for expansion.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Computer Associates Intl., Inc.
Computer software
Cendant Corp.
Business services
Costco Companies, Inc.
Retail
CBS Corp.
Broadcasting
Tele-Communications, Inc. Class A
Cable television
American Express Co.
Finance
Federal Home Loan Mortgage Corp.
Finance
Tele-Communications TCI Ventures Group Class A
Financial services
Federal National Mortgage Association
Finance
Compuware Corp.
Computer software
Footnote reads:
These holdings represent 16.5% of the fund's net assets as of 1/31/98.
Portfolio holdings will vary over time.
One beneficiary in the fund's portfolio is Chancellor Media Corporation, which
was formed in September with the merger of Chancellor Broadcasting and
Evergreen Media Corporation, both of which were already in your fund's
portfolio. The new company owns and operates 99 radio stations in 21 of the
nation's largest markets. Clear Channel Communications also acquired billboard
company Universal Outdoor, which represents a growing segment in the media
area.
Another outstanding performer was CBS Corporation, formerly Westinghouse
Electric. Now a pure broadcasting business, the company is better positioned
to benefit from this rapidly growing sector. CBS has already profited from
numerous radio acquisitions and continues to make improvements in other areas
such as television programming and the launching of new cable networks.
We also began to acquire cable television stocks. For example, because we
bought the stock of Tele-Communications some time ago, the fund profited from
the split of Tele-Communications and TCI Ventures. In general, we have
observed a resurgence in demand for cable-related products as well as new
areas of growth including the joining of cable, the Internet, and
telecommunications within households.
* PORTFOLIO POSITIONED FOR AN FOR UNCERTAIN 1998
As market volatility escalated in the fourth quarter of 1997, investors sought
high-quality dollar-denominated assets. This development sparked a rally in
U.S. Treasury bonds, but it also helped large-capitalization stocks that the
market perceived to have dependable earnings growth potential. Hence, the Dow
Jones Industrial Average returned a record third straight year of gains
greater then 20%. Therefore, we believe the risk is higher that earnings
disappointments in these large-cap stocks will be reported on a regular basis.
With this in mind, we believe the portfolio will benefit from our emphasis on
small and midsize stocks possessing higher growth rates and more reasonable
valuations than their larger brethren.
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 1/31/98, there is no guarantee the fund will continue to hold
these securities in the future. This 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
Voyager Fund is designed for investors seeking aggressive capital
appreciation through common stocks.
TOTAL RETURN FOR PERIODS ENDED 1/31/98
Class A Class B Class M
(inception date) (4/1/69) (4/27/92) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 3.98% -2.01% 3.63% -1.21% 3.72% 0.07%
- ------------------------------------------------------------------------------
1 year 20.41 13.47 19.53 14.53 19.80 15.63
- ------------------------------------------------------------------------------
5 years 136.59 123.01 127.83 125.83 130.70 122.65
Annual average 18.80 17.40 17.90 17.69 18.20 17.36
- ------------------------------------------------------------------------------
10 years 468.25 435.57 423.32 423.32 438 419.16
Annual average 18.97 18.27 18.00 18.00 18.33 17.90
- ------------------------------------------------------------------------------
Annual average
(Life of fund) 14.05 13.81 12.97 12.97 13.27 13.13
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/98
Standard
& Poor's Consumer
500 Index Price Index
- ------------------------------------------------------------------------------
6 months 3.56% 0.69%
- ------------------------------------------------------------------------------
1 year 26.91 1.57
- ------------------------------------------------------------------------------
5 years 152.3 13.32
Annual average 20.34 2.53
- ------------------------------------------------------------------------------
10 years 410.03 39.67
Annual average 17.69 3.40
- ------------------------------------------------------------------------------
Annual average
(Life of fund) 12.34 5.33
- ------------------------------------------------------------------------------
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. All
returns assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. 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.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 1/31/98
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income -- -- --
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term $1.111 $1.111 $1.111
- ------------------------------------------------------------------------------
Short-term 0.096 0.096 0.096
- ------------------------------------------------------------------------------
Total $1.207 $1.207 $1.207
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
7/31/97 $19.49 $20.68 $18.57 $19.22 $19.92
- ------------------------------------------------------------------------------
1/31/98 19.01 20.17 17.99 18.68 19.36
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/97
(most recent calendar quarter)
Class A Class B Class M
(inception date) (4/1/69) (4/27/92) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 13.13% 6.60% 12.72% 7.72% 12.86% 8.92%
- ------------------------------------------------------------------------------
1 year 25.98 18.76 25.07 20.07 25.39 20.99
- ------------------------------------------------------------------------------
5 years 136.86 123.28 128.25 126.25 131.13 123.04
Annual average 18.82 17.43 17.95 17.74 18.24 17.40
- ------------------------------------------------------------------------------
10 years 471.63 438.76 426.32 426.32 441.04 422.10
Annual average 19.05 18.34 18.07 18.07 18.39 17.97
- ------------------------------------------------------------------------------
Annual average
(Life of fund) 14.10 13.87 13.03 13.03 13.33 13.19
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. Investment returns and
principal value will fluctuate so that an investor's shares, when sold,
may be worth more or less than their original cost. 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 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 interest payments and
does 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.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Portfolio of investments owned
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (96.4%) *
NUMBER OF SHARES VALUE
Advertising (1.4%)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
807,221 Lamar Advertising Co. + $ 33,146,530
2,172,410 Omnicom Group, Inc. 88,118,381
3,876,846 Outdoor Systems, Inc. + 93,044,304
465,645 TMP Worldwide Inc. + 10,768,041
767,675 Universal Outdoor Holdings, Inc. + 38,863,547
---------------
263,940,803
Aerospace and Defense (0.4%)
- ------------------------------------------------------------------------------------------------------------
250,000 Lockheed Martin Corp. 26,015,625
428,400 Northrop Grumman Corp. 52,532,550
---------------
78,548,175
Apparel (0.3%)
- ------------------------------------------------------------------------------------------------------------
389,836 Gucci Group N.V. (Netherlands) 15,520,346
1,175,133 Stage Stores, Inc. + 45,573,127
182,402 The Men's Wearhouse, Inc. + 6,543,672
---------------
67,637,145
Automotive (0.5%)
- ------------------------------------------------------------------------------------------------------------
359,495 Avis Rent A Car, Inc. 12,874,415
225,411 Budget Group, Inc. (Japan) + 7,875,297
1,821,000 Snap-On Inc. 71,360,438
---------------
92,110,150
Banks (4.1%)
- ------------------------------------------------------------------------------------------------------------
3,108,600 Banc One Corp. 173,693,025
2,400,000 BankAmerica Corp. 170,550,000
1,344,000 Fifth Third Bancorp 102,480,000
1,026,300 First Chicago NBD Corp. 76,587,638
457,000 Firstar Corp. 17,737,313
562,600 NationsBank Corp. 33,756,000
637,700 PNC Bank Corp. 32,881,406
2,898,450 Washington Mutual, Inc. 186,225,413
---------------
793,910,795
Basic Industrial Products (0.4%)
- ------------------------------------------------------------------------------------------------------------
1,326,000 General Signal Corp. 51,714,000
1,318,350 Hussmann International, Inc. 17,962,519
---------------
69,676,519
Broadcasting (4.8%)
- ------------------------------------------------------------------------------------------------------------
11,057,107 CBS Corp. 331,022,141
4,589,546 Chancellor Media Corp. 157,765,644
3,099,853 Clear Channel Communications, Inc. + 238,688,681
1,036,181 Heftel Broadcasting Corp. Class A + 47,405,281
139,820 ProSieben Media AG (Germany) + 6,917,242
28,680 ProSieben Media AG 144A (Germany) + 1,426,710
944,157 Sinclair Broadcast Group, Inc. Class A + 44,611,418
955,600 Univision Communications Inc. Class A + 36,432,250
2,015,000 Westwood One, Inc. + [SECTION MARK] 67,502,500
---------------
931,771,867
Building Products (0.4%)
- ------------------------------------------------------------------------------------------------------------
1,450,000 Masco Corp. 71,412,500
Business Equipment and Services (0.1%)
- ------------------------------------------------------------------------------------------------------------
328,994 Renaissance Worldwide, Inc. 16,059,020
Business Services (6.4%)
- ------------------------------------------------------------------------------------------------------------
308,869 Abacus Direct Corp. + 10,347,112
730,836 Accustaff, Inc. + 18,819,027
616,545 Affiliated Computer Services, Inc. Class A + 18,149,543
1,356,746 Airgas, Inc. + 21,114,360
444,591 Caribiner Intl., Inc. + 14,004,617
12,429,137 Cendant Corp. + 421,037,016
1,698,600 Cintas Corp. 70,916,550
744,075 Corestaff, Inc. + 18,229,838
5,201,770 Corporate Express, Inc. + 46,003,153
2,650,000 Deluxe Corp. 87,450,000
1,374,526 Interim Services Inc. + 32,816,808
1,773,247 Interpublic Group of Cos., Inc. 86,999,931
659,566 Paychex, Inc. 31,535,499
30,054,960 Rentokil Group PLC (United Kingdom) 140,606,908
3,883,236 Robert Half International, Inc. + 149,989,991
507,800 Select Appointments Holdings PLC ADR
(United Kingdom) 9,902,100
2,469,773 Serco Group PLC (United Kingdom) + 43,397,011
682,100 Snyder Communications, Inc. + 25,664,013
---------------
1,246,983,477
Cable Television (2.7%)
- ------------------------------------------------------------------------------------------------------------
1,179,850 HSN, Inc. + 56,264,097
2,015,700 Tele-Comm Liberty Media Group, Inc. Class A + 72,187,256
10,801,302 Tele-Communications, Inc. Class A + 302,436,456
3,411,100 US West Media Group 101,267,031
---------------
532,154,840
Chemicals (0.5%)
- ------------------------------------------------------------------------------------------------------------
1,724,300 Raychem Corp. 64,337,944
865,200 Witco Chemical Corp. 35,040,600
---------------
99,378,544
Computer Services (4.0%)
- ------------------------------------------------------------------------------------------------------------
1,748,997 America Online, Inc. + 167,357,150
2,272,396 Capita Group PLC (United Kingdom) 14,227,202
356,509 CBT Group PLC ADR (Ireland) + 32,397,755
549,553 CheckFree Holdings Corp. 13,601,437
5,488,210 EMC Corp. + 178,709,838
1,214,400 Galileo International, Inc. + 35,824,800
1,404,200 Getronics Electric N.V. (Netherlands) 47,533,055
817,940 IDT Corp. + 20,652,985
3,468,008 Keane, Inc. + 140,887,825
386,500 Misys PLC (United Kingdom) 14,723,920
2,987,294 Sterling Commerce, Inc. + 108,476,113
105,100 Whittman-Hart, Inc. + 3,047,900
---------------
777,439,980
Computer Software (9.0%)
- ------------------------------------------------------------------------------------------------------------
309,065 Arbor Software Corp. + 11,705,837
2,454,214 BMC Software, Inc. + 166,272,999
3,450,654 Cadence Design Systems, Inc. + 96,618,312
198,055 Citrix Systems, Inc. + 13,616,281
8,949,515 Computer Associates International, Inc. 476,002,329
6,464,630 Compuware Corp. + 252,120,570
338,152 Documentum, Inc. + 12,173,472
2,702,967 Electronic Arts, Inc. + 97,137,877
639,400 Geoworks + 3,826,409
1,093,600 Industri-Matematik International Corp. (Sweden) + [SECTION MARK] 28,707,000
198,472 Information Management Resources, Inc. 7,244,228
1,743,659 Intuit, Inc. + 65,169,255
660,300 Lernout & Hauspie Speech Products N.V. (Belgium) + 38,875,163
395,019 Microsoft Corp. + 58,931,897
4,360,255 Parametric Technology Corp. + 221,282,941
79,503 PeopleSoft, Inc. + 2,782,605
668,500 Saville Systems Ireland PLC ADR (Ireland) + 27,241,375
962,405 Security Dynamics Technologies, Inc. + 33,924,776
2,291,000 SEMA Group PLC (United Kingdom) 64,850,249
1,487,298 Synopsys, Inc. + 46,013,282
828,700 Vantive Corp. + 20,406,738
302,423 Viasoft, Inc. + 9,129,394
---------------
1,754,032,989
Consumer Services (0.4%)
- ------------------------------------------------------------------------------------------------------------
411,000 Applied Graphics Technologies, Inc. 21,988,500
935,500 Hillenbrand Industries, Inc. 47,944,375
---------------
69,932,875
Containers (0.1%)
- ------------------------------------------------------------------------------------------------------------
350,000 Temple Inland, Inc. 19,425,000
Correctional Facilities (--%)
- ------------------------------------------------------------------------------------------------------------
305,400 Wackenhut Corrections Corp. + 7,787,700
Cosmetics (--%)
- ------------------------------------------------------------------------------------------------------------
403,464 Thermolase Corp. + 3,732,042
292,948 ThermoLase Corp. Units + 4,833,642
---------------
8,565,684
Education Services (0.1%)
- ------------------------------------------------------------------------------------------------------------
525,172 Apollo Group, Inc. Class A + 23,764,033
Electric Utilities (0.2%)
- ------------------------------------------------------------------------------------------------------------
1,473,526 CalEnergy, Inc. + 37,851,199
Electronic Components (0.2%)
- ------------------------------------------------------------------------------------------------------------
314,800 Metromedia Fiber Network, Inc. Class A + 7,830,650
345,877 Sanmina Corp. + 23,260,228
---------------
31,090,878
Electronics and Electrical Equipment (2.9%)
- ------------------------------------------------------------------------------------------------------------
1,300,000 Applied Materials, Inc. + 42,656,250
2,883,600 General Electric Co. 223,479,000
2,250,000 Hewlett-Packard Co. 135,000,000
800,000 Micron Technology, Inc. 27,700,000
826,800 Sipex Corp. + 24,752,325
1,461,930 Solectron Corp. + 63,228,473
1,947,100 Thermo Instrument Systems, Inc. + 56,709,288
---------------
573,525,336
Energy-Related (1.3%)
- ------------------------------------------------------------------------------------------------------------
705,354 AES Corp. + 30,197,968
5,663,826 Thermo Electron Corp. + 220,889,214
---------------
251,087,182
Entertainment (0.2%)
- ------------------------------------------------------------------------------------------------------------
431,100 ITT Corp. + 34,488,000
Environmental Control (1.0%)
- ------------------------------------------------------------------------------------------------------------
250,700 Allied Waste Industries, Inc. + 5,202,025
1,500,000 Browning-Ferris Industries, Inc. 51,843,750
1,563,953 Philip Services Corp. (Canada) + 12,902,612
1,830,768 Republic Industries, Inc. + 38,331,705
206,746 U.S. Filter Corp. + 6,719,245
2,282,850 USA Waste Services, Inc. + 83,894,738
---------------
198,894,075
Finance (5.0%)
- ------------------------------------------------------------------------------------------------------------
3,274,210 American Express Co. 274,010,449
6,087,027 Freddie Mac 270,872,702
4,205,160 Fannie Mae 259,668,630
1,421,900 Morgan Stanley, Dean Witter, Discover and Co. 83,003,413
2,862,542 TCF Financial Corp. 91,422,435
---------------
978,977,629
Financial Services (3.0%)
- ------------------------------------------------------------------------------------------------------------
1,643,700 Associates First Capital Corp. 111,771,600
479,718 Concord EFS, Inc. + 12,352,739
885,057 FIRSTPLUS Financial Group, Inc. + 26,883,606
3,450,000 MBNA Corp. 107,165,625
1,106,700 Providian Financial Corp. 54,089,963
119,600 Star Banc Corp. 6,585,475
8,897,048 Tele-Communications TCI ventures Group Class A + 262,462,916
---------------
581,311,924
Food and Beverages (2.2%)
- ------------------------------------------------------------------------------------------------------------
1,607,900 Coca-Cola Enterprises, Inc. 51,251,813
981,200 General Mills, Inc. 73,038,075
3,257,300 PepsiCo, Inc. 117,466,381
2,750,099 Sara Lee Corp. 150,052,277
2,636,700 Whitman Corp. 43,835,138
---------------
435,643,684
Gaming (0.2%)
- ------------------------------------------------------------------------------------------------------------
1,033,900 MGM Grand, Inc. + 37,026,544
Gas Pipelines (0.1%)
- ------------------------------------------------------------------------------------------------------------
410,700 El Paso Natural Gas Co. 26,259,131
Gas Utilities (0.4%)
- ------------------------------------------------------------------------------------------------------------
1,085,100 Columbia Gas System, Inc. 82,331,963
Health Care (0.1%)
- ------------------------------------------------------------------------------------------------------------
391,300 Concentra Managed Care, Inc. 12,570,513
Health Care Information Systems (0.6%)
- ------------------------------------------------------------------------------------------------------------
2,162,958 HBO & Co. 113,149,740
Health Care Services (1.3%)
- ------------------------------------------------------------------------------------------------------------
611,293 ABR Information Services, Inc. + 15,053,090
438,200 CareMatrix Corp. + 11,119,325
2,996 Coram Healthcare Corp. + 8,052
2,836,698 HEALTHSOUTH Corp. + 63,648,411
123,400 Lincare Holdings, Inc. + 7,542,825
775,572 Renal Treatment Centers, Inc. + 24,866,777
909,500 Total Renal Care Holdings, Inc. + 22,112,219
2,316,939 United Healthcare Corp. 118,743,124
---------------
263,093,823
Hospital Management (0.4%)
- ------------------------------------------------------------------------------------------------------------
3,575,696 Health Management Assoc., Inc. + 85,593,211
Insurance (1.4%)
- ------------------------------------------------------------------------------------------------------------
763,300 AFLAC Inc. 41,552,144
1,964,900 American General Corp. 110,771,238
562,500 American International Group, Inc. 62,050,781
902,000 AON Corp. 50,342,875
---------------
264,717,038
Leisure (0.1%)
- ------------------------------------------------------------------------------------------------------------
294,280 Adidas AG 144A ADS (Germany) 21,261,730
138,600 Signature Resorts, Inc. + 3,378,375
---------------
24,640,105
Lodging (0.7%)
- ------------------------------------------------------------------------------------------------------------
2,764,883 Extended Stay America, Inc. + 34,215,427
1,392,800 Prime Hospitality Corp. + 26,289,100
1,684,343 Promus Hotel Corp. + 76,111,249
---------------
136,615,776
Machinery (0.1%)
- ------------------------------------------------------------------------------------------------------------
394,906 Sidel S.A. (France) 26,215,420
Medical Management Services (--%)
- ------------------------------------------------------------------------------------------------------------
105,200 NCS HealthCare, Inc. Class A + 2,722,050
Medical Supplies and Devices (3.4%)
- ------------------------------------------------------------------------------------------------------------
916,900 Bergen Brunswig Corp. Class A 41,776,256
796,247 Cytyc Corp. + 17,218,841
469,235 Henry Schein, Inc. + 15,484,755
939,830 Johnson & Johnson 62,909,871
614,000 Lifecore Biomedical, Inc. + [SECTION MARK] 11,359,000
1,568,234 Medtronic, Inc. 80,077,949
410,000 Minimed, Inc. + 15,990,000
1,569,695 Omnicare, Inc. 45,128,731
1,113,927 Physician Sales & Service, Inc. + 20,607,650
3,887,587 Stryker Corp. 143,597,745
739,115 Sybron International Corp. + 35,061,768
2,403,093 Thermo Cardiosystems, Inc. + 52,567,659
399,050 Thermotrex Corp. + 7,182,900
31,285 Trex Medical Corp. + 439,945
2,687,400 Tyco International Ltd. + 119,253,375
---------------
668,656,445
Metals and Mining (0.2%)
- ------------------------------------------------------------------------------------------------------------
243,050 SGL Carbon AG (Germany) 30,558,957
Networking Equipment (0.7%)
- ------------------------------------------------------------------------------------------------------------
694,395 Cisco Systems, Inc. + 43,790,285
3,017,590 3Com Corp. + 99,769,069
---------------
143,559,354
Nursing Homes (0.3%)
- ------------------------------------------------------------------------------------------------------------
1,390,800 Health Care & Retirement Corp. + 55,197,375
Office Equipment (0.4%)
- ------------------------------------------------------------------------------------------------------------
3,708,663 Viking Office Products, Inc. + 86,226,415
Oil Services (0.4%)
- ------------------------------------------------------------------------------------------------------------
501,736 BJ Services Co. + 30,386,387
1,869,150 Nabors Industries, Inc. 44,742,778
---------------
75,129,165
Oil and Gas (3.6%)
- ------------------------------------------------------------------------------------------------------------
1,033,612 British Petroleum PLC ADR (United Kingdom) 83,011,964
1,578,250 Camco International, Inc. 86,310,547
900,000 Elf Aquitane ADR (France) 50,906,250
2,250,000 Halliburton Co. 101,109,375
2,368,600 National-Oilwell, Inc. + 62,767,900
1,849,516 Schlumberger Ltd. 136,286,210
2,548,900 Total Corp. ADR (France) 132,224,188
2,249,750 Varco International, Inc. + 46,119,875
---------------
698,736,309
Paper and Forest Products (0.7%)
- ------------------------------------------------------------------------------------------------------------
1,741,200 Fort James Corp. 74,762,775
371,400 Unisource Worldwide, Inc. 5,269,238
1,000,000 Weyerhaeuser Co. 49,812,500
---------------
129,844,513
Pharmaceuticals and Biotechnology (6.2%)
- ------------------------------------------------------------------------------------------------------------
700,000 American Home Products Corp. 66,806,250
1,792,000 Bristol-Myers Squibb Co. 178,640,000
994,300 Dura Pharmaceuticals, Inc. + 39,461,281
1,010,422 Elan Corp. PLC ADR (Ireland) + 52,478,793
950,982 Gilead Sciences, Inc. + 38,514,771
609,400 Lilly (Eli) & Co. 41,134,500
211,300 Medicis Pharmaceutical Corp. Class A + 9,825,450
155,500 Merck & Co., Inc. 18,232,375
100,250 Novartis AG ADR (Switzerland) 171,837,738
608,344 Parexel International Corp. + 20,987,868
1,491,000 Pfizer, Inc. 122,168,813
2,625,151 Pharmacia & Upjohn, Inc. 100,904,242
672,724 Quintiles Transnational Corp. + 25,605,557
1,094,500 Schering-Plough Corp. 79,214,438
809,985 Sepracor, Inc. + 28,450,723
1,701,000 Smithkline Beecham PLC ADR (United Kingdom) 107,269,313
280,000 Transkaryotic Therapies, Inc. (Malaysia) + 9,695,000
803,627 Vertex Pharmaceuticals, Inc. + 31,542,360
406,300 Warner-Lambert Co. 61,148,150
---------------
1,203,917,622
Publishing (1.8%)
- ------------------------------------------------------------------------------------------------------------
500,000 Gannett Co., Inc. 30,250,000
1,100,000 Harcourt General, Inc. 58,643,750
500,000 McGraw-Hill, Inc. 34,906,250
488,935 Peterson Companies, Inc. Class A + 11,245,505
1,250,000 Tribune Co. 75,937,500
972,698 Wolters Kluwer N.V. (Netherlands) 131,611,416
---------------
342,594,421
Railroads (0.3%)
- ------------------------------------------------------------------------------------------------------------
300,000 Burlington Northern Santa Fe Corp. 26,025,000
492,900 GATX Corp. 35,766,056
---------------
61,791,056
Restaurants (0.7%)
- ------------------------------------------------------------------------------------------------------------
1,017,900 Cracker Barrel Old Country Store, Inc. 35,244,788
9,412,820 J.D. Wetherspoon PLC (United Kingdom) 44,535,346
798,900 Landry's Seafood Restaurants, Inc. + 17,675,663
826,410 Papa Johns International, Inc. + 28,614,446
1,006,400 PizzaExpress PLC (United Kingdom) 11,280,139
---------------
137,350,382
Retail (11.7%)
- ------------------------------------------------------------------------------------------------------------
1,529,800 Albertsons, Inc. 72,952,338
1,566,825 Bed Bath & Beyond, Inc. + 62,085,441
1,055,493 Borders Group, Inc. 34,039,649
1,837,751 CompUSA, Inc. + 56,855,422
542,111 Consolidated Stores Corp. + 22,294,315
8,463,062 Costco Companies, Inc. + 367,085,314
1,460,520 CVS Corp. 95,755,343
1,800,000 Dayton Hudson Corp. 129,487,500
7,411,849 Dixons Group PLC (United Kingdom) 59,434,302
720,875 Dollar General Corp. 26,221,828
1,542,424 Dollar Tree Stores, Inc. 65,649,422
2,000,000 Federated Department Stores, Inc. + 84,750,000
1,683,834 Fred Meyer, Inc. + 62,091,379
2,083,100 General Nutrition Companies, Inc. + 75,121,794
1,634,600 Home Depot, Inc. (The) 98,586,813
2,732,717 Kohls Corp. + 189,582,242
1,450,000 Lowe's Cos., Inc. 73,315,625
358,200 Michaels Stores, Inc. 11,014,650
3,361,650 Office Depot, Inc. + 74,796,713
8,045,553 Officemax, Inc. + 117,666,213
1,100,000 Payless Shoesource, Inc. + 71,568,750
785,137 Payment Services, Inc. + 10,942,847
970,179 Petco Animal Supplies, Inc. + 23,890,658
430,000 Rexall Sundown, Inc. + 14,861,875
2,283,500 Rite Aid Corp. 142,576,031
5,181,100 Starbucks Corp. + 189,433,969
751,670 Williams-Sonoma, Inc. + 31,992,954
689,935 Wolverine World Wide, Inc. 18,628,245
---------------
2,282,681,632
Satellite Services (0.5%)
- ------------------------------------------------------------------------------------------------------------
2,201,600 PanAmSat Corp. + 99,347,200
Semiconductors (2.9%)
- ------------------------------------------------------------------------------------------------------------
1,338,127 Altera Corp. + 45,830,850
1,805,047 Analog Devices, Inc. + 53,248,887
122,600 Galileo Technology Ltd. (Israel) + 4,566,850
356,934 Lattice Semiconductor Corp. + 16,463,581
2,353,563 Linear Technology Corp. 155,923,549
4,715,362 Maxim Integrated Products Inc. + 163,269,409
1,700,000 National Semiconductor Corp. + 47,812,500
1,400,000 Texas Instruments, Inc. 76,475,000
312,600 Xilinx, Inc. + 11,859,263
---------------
575,449,889
Specialty Consumer Products (1.2%)
- ------------------------------------------------------------------------------------------------------------
846,593 Central Garden and Pet Co. + 26,032,735
1,701,497 Fastenal Co. 74,759,524
880,198 Luxottica Group S.P.A. ADR (Italy) 60,733,662
1,901,400 Mattel, Inc. 77,006,700
---------------
238,532,621
Steel (0.1%)
- ------------------------------------------------------------------------------------------------------------
1,001,100 Lone Star Technologies, Inc. + 28,969,331
Supermarkets (0.1%)
- ------------------------------------------------------------------------------------------------------------
31,150 Carrefour Supermarche SA (France) 16,817,240
Telecommunication Equipment (0.7%)
- ------------------------------------------------------------------------------------------------------------
949,100 Advanced Fibre Communications + 28,235,725
57,375 Excel Switching Corp. + 1,104,469
756,428 P-Com, Inc. + 14,750,346
462,550 Premisys Communications, Inc. + 13,211,584
557,689 Qwest Communications International, Inc. + 39,526,208
152,700 Tekelec + 4,953,206
687,662 Tellabs, Inc. + 35,199,699
---------------
136,981,237
Telecommunications (0.2%)
- ------------------------------------------------------------------------------------------------------------
344,400 RSL Communications, Inc. 7,662,900
589,000 Southern New England Telecommunications Corp. 38,358,625
---------------
46,021,525
Telephone Services (1.5%)
- ------------------------------------------------------------------------------------------------------------
460,945 Intermedia Communications, Inc. + 28,348,118
1,321,600 McLeod, Inc. Class A + 45,512,600
81,400 NEXTLINK Communications, Inc. Class A + 2,024,825
1,052,100 SBC Communications, Inc. 81,800,775
2,176,000 Sprint Corp. 129,200,000
517,180 Tel-Save Holdings, Inc. + 12,283,025
---------------
299,169,343
Telephone Utilities (0.5%)
- ------------------------------------------------------------------------------------------------------------
1,523,400 American Telephone & Telegraph Co. 95,402,925
Trucking (0.2%)
- ------------------------------------------------------------------------------------------------------------
1,300,000 Ryder System, Inc. 43,550,000
Wireless Communications (1.1%)
- ------------------------------------------------------------------------------------------------------------
558,080 Clearnet Communications, Inc. Class A, (Canada) + 6,627,200
6,384,009 NEXTEL Communications, Inc. Class A + 174,363,246
683,419 Teleport Communications Group Inc. Class A + 38,143,323
---------------
219,133,769
---------------
Total Common Stocks (cost $13,539,463,472) $18,837,956,043
CONVERTIBLE BONDS AND NOTES (--%) * (cost $8,241,000)
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
$ 8,000,000 Signature Resorts, Inc. cv. sub. notes 5 3/4s, 2007 $ 8,160,000
SHORT-TERM INVESTMENTS (3.6%) *
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
$25,000,000 American Home Products effective yield of 5.68s,
February 9, 1998 $ 24,964,500
25,000,000 Credit Suisse First Boston effective yield of 5.71s,
March 4, 1998 24,877,076
21,000,000 Freddie Mac effective yield of 5.58s, March 9, 1998 20,879,565
20,000,000 Fannie Mae effective yield of 5.66s, February 18, 1998 19,943,400
50,000,000 Fannie Mae effective yield of 5.62s, March 10, 1998 49,703,389
25,000,000 Fannie Mae effective yield of 5.59s, March 24, 1998 24,798,139
25,000,000 Fannie Mae effective yield of 5.57s, April 28, 1998 24,663,479
25,000,000 Ford Motor Credit Co. effective yield of 5.72s,
March 23, 1998 24,797,417
25,000,000 General Electric Capital Corp. effective yield of 5 3/4s,
February 23, 1998 24,908,160
50,000,000 General Motors Acceptance Corp effective yield of 5 1/2s,
February 17, 1998 49,870,139
50,000,000 Morgan (J.P) & Co Inc. effective yield of 5.67s,
April 17, 1998 49,401,500
50,000,000 Lloyds Bank PLC effective yield of 5.42s, April 7, 1998 49,503,167
25,000,000 Merrill Lynch & Co Inc effective yield of 5.71s,
March 11, 1998 24,845,354
30,000,000 Merrill Lynch & Co Inc effective yield of 5.45s,
April 27, 1998 29,609,417
36,467,000 Metlife Funding Inc. effective yield of 5.73s,
March 25, 1998 36,159,370
25,000,000 Metlife Funding Inc. effective yield of 5.72s,
February 12, 1998 24,952,333
20,000,000 National Rural Utilities effective yield of 5.67s,
March 24, 1998 19,836,200
30,000,000 Preferred Receivables Funding effective yield of 5.87s,
February 5, 1998 29,975,542
50,000,000 Societe Generale N.A. Inc 5.72s, March 16, 1998 49,650,444
91,000,000 Interest in $750,000,000 joint repurchase agreement
dated January 30, 1998 with Goldman, Sachs & Co.
due February 2, 1998 with respect to various
U.S. Treasury obligations -- maturity value
of $91,042,391 for an effective yield of 5.59% 91,028,261
---------------
Total Short-Term Investments (cost $694,366,852) $ 694,366,852
- ------------------------------------------------------------------------------------------------------------
Total Investments (cost $14,242,071,324) *** $19,540,482,895
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $19,532,129,462.
*** The aggregate identified cost on a tax basis is $14,280,505,822, resulting in gross unrealized
appreciation and depreciation of $5,732,351,712 and $472,374,639, respectively, or net unrealized
appreciation of $5,259,977,073.
+ Non-income-producing security.
[SECTIONMARK] Affiliated Companies. (Note 5)
144A after the name of a security represents those exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
ADR or ADS after the name of a foreign holding stands for American Depository Receipts 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.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
January 31, 1998 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $14,242,071,324) (Note 1) $19,540,482,895
- ---------------------------------------------------------------------------------------------------
Cash 215,425
- ---------------------------------------------------------------------------------------------------
Dividends, interest, and other receivables 9,577,857
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 41,221,470
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 128,089,035
- ---------------------------------------------------------------------------------------------------
Total assets 19,719,586,682
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 124,349,331
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 23,918,591
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 23,100,089
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 7,229,454
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 100,039
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 4,892
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 7,632,742
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 1,122,082
- ---------------------------------------------------------------------------------------------------
Total liabilities 187,457,220
- ---------------------------------------------------------------------------------------------------
Net assets $19,532,129,462
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $13,942,790,974
- ---------------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (44,571,665)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments
and foreign currency transactions (Note 1) 335,521,993
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign currencies 5,298,388,160
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $19,532,129,462
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($11,790,349,439 divided by 620,337,382 shares) $19.01
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $19.01)* $20.17
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($6,213,756,723 divided by 345,496,105 shares)** $17.99
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($271,586,209 divided by 14,540,829 shares) $18.68
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $18.68)* $19.36
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($1,256,437,091 divided by 65,263,702 shares) $19.25
- ---------------------------------------------------------------------------------------------------
* 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, 1998 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $13,198) $ 55,992,888
- --------------------------------------------------------------------------------------------------
Interest 13,559,102
- --------------------------------------------------------------------------------------------------
Total investment income 69,551,990
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 45,633,014
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 21,584,214
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 125,090
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 29,518
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 14,390,326
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 29,665,030
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 873,203
- --------------------------------------------------------------------------------------------------
Reports to shareholders 286,526
- --------------------------------------------------------------------------------------------------
Registration fees 450,265
- --------------------------------------------------------------------------------------------------
Auditing 59,592
- --------------------------------------------------------------------------------------------------
Legal 58,142
- --------------------------------------------------------------------------------------------------
Postage 1,613,934
- --------------------------------------------------------------------------------------------------
Other 929,187
- --------------------------------------------------------------------------------------------------
Total expenses 115,698,041
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (1,592,137)
- --------------------------------------------------------------------------------------------------
Net expenses 114,105,904
- --------------------------------------------------------------------------------------------------
Net investment loss (44,553,914)
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1, 3, and 5) (including realized
loss of $2,133,907 on sales of investments in affiliated issuers) 1,054,190,523
- --------------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Notes 1 and 3) (11,891)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the period 19,390
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (296,200,251)
- --------------------------------------------------------------------------------------------------
Net gain on investments 757,997,771
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 713,443,857
- --------------------------------------------------------------------------------------------------
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
1998* 1997
--------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (44,553,914) $ (32,079,897)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 1,054,178,632 574,607,164
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies (296,180,861) 3,610,018,684
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 713,443,857 4,152,545,951
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (699,632,778) (548,605,542)
- ----------------------------------------------------------------------------------------------------------------------
Class B (385,914,127) (281,238,919)
- ----------------------------------------------------------------------------------------------------------------------
Class M (15,957,070) (8,171,341)
- ----------------------------------------------------------------------------------------------------------------------
Class Y (73,035,441) (52,119,074)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,900,834,668 3,295,035,279
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 1,439,739,109 6,557,446,354
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 18,092,390,353 11,534,943,999
- ----------------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment loss of $44,571,665
and $17,751, respectively) $19,532,129,462 $18,092,390,353
- ----------------------------------------------------------------------------------------------------------------------
* 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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.49 $15.73 $14.42 $11.19 $11.02 $9.67
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.02)(d) --(d) (.02)(d) .02 (.02) (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .75 4.85 2.19 3.72 .65 1.89
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .73 4.85 2.17 3.74 .63 1.87
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.01 $19.49 $15.73 $14.42 $11.19 $11.02
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.98* 32.22 15.49 34.72 5.49 19.69
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $11,790,349 $11,158,273 $7,332,248 $4,895,180 $3,051,878 $2,403,332
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .50* 1.02 1.03 1.07 1.10 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.12)* -- (.10) .17 (.18) (.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 32.42* 59.77 57.92 65.43 57.74 64.62
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (c) $0.0510 $0.0546
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended July 31, 1996 and thereafter,
includes amounts paid through brokerage services and expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(c) Average commission rate paid on security trades is requried for fiscal periods beginning on or
after September 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of 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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.57 $15.15 $14.01 $10.97 $10.89 $9.63
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.09)(d) (.12)(d) (.13)(d) (.06) (.05) (.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .72 4.63 2.13 3.61 .59 1.81
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .63 4.51 2.00 3.55 .54 1.78
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.99 $18.57 $15.15 $14.01 $10.97 $10.89
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.63* 31.17 14.70 33.65 4.71 18.79
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $6,213,757 $5,664,375 $3,405,318 $1,870,370 $911,069 $408,361
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .88* 1.77 1.78 1.82 1.84 1.87
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.50)* (.75) (.85) (.58) (.91) (.91)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 32.42* 59.77 57.92 65.43 57.74 64.62
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (c) $0.0510 $0.0546
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended July 31, 1996 and thereafter,
includes amounts paid through brokerage services and expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(c) Average commission rate paid on security trades is requried for fiscal periods beginning on or
after September 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of 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. 1, 1994+
operating performance (Unaudited) Year ended July 31 to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $19.22 $15.60 $14.37 $11.79
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.07)(d) (.08)(d) (.09)(d) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .74 4.79 2.18 3.10
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .67 4.71 2.09 3.09
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.68 $19.22 $15.60 $14.37
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.72* 31.57 14.97 27.42*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $271,586 $208,656 $87,782 $19,004
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .75* 1.52 1.50 1.06*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.37)* (.50) (.57) (.24)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 32.42* 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (c) $0.0510 $0.0546
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended July 31, 1996 and thereafter,
includes amounts paid through brokerage services and expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(c) Average commission rate paid on security trades is requried for fiscal periods beginning on or
after September 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of 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 31, 1994+
operating performance (Unaudited) Year ended July 31 to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.70 $15.85 $14.48 $11.22 $11.24
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) --(d) .04(d) .02(d) .03 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .76 4.90 2.21 3.74 (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .76 (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.25 $19.70 $15.85 $14.48 $11.22
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 4.09* 32.56 15.85 34.90 (0.18)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,256,437 $1,061,087 $709,595 $351,817 $82,102
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .38* .77 .77 .83 .31*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) --* .25 .15 .39 (.05)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 32.42* 59.77 57.92 65.43 57.74
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (c) $0.0510 $0.0546
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended July 31, 1996 and thereafter,
includes amounts paid through brokerage services and expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(c) Average commission rate paid on security trades is requried for fiscal periods beginning on or
after September 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of weighted average
number of shares outstanding during the period.
</TABLE>
Notes to financial statements
January 31, 1998 (Unaudited)
Note 1
Significant accounting policies
Putnam Voyager Fund (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. 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 eight years, 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 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,
class B, and class M shares, but do not bear a distribution fee. Class Y
shares are sold to defined contribution plans that initially invest at least
$250 million in a combination of Putnam Funds an other accounts managed by
affiliates of Putnam Management.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if
that fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies followed by the
fund in the preparation of its financial statements. The preparation of
financial statements is in conformity with generally accepted accounting
principles and requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities. Actual results could
differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or, if no sales are reported -- as in the case of some
securities traded over the counter -- the last reported bid price. Short-term
investments having remaining maturities of 60 days or less are stated at
amortized cost, which approximates market value, and other investments are
stated at fair value following procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other registered
investment companies and certain other accounts managed by Putnam 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. Putnam Management is responsible
for determining that the value of these underlying securities is at all times
at least equal to the resale price, including accrued interest.
D) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date except that certain dividends from foreign
securities are recorded as soon as the fund is informed of the ex-dividend
date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities, currency
holdings, other assets and liabilities are recorded in the books and records
of the fund after translation to U.S. dollars based on the exchange rates on
that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange
rates when accrued or incurred. The fund does not isolate that portion of
realized or unrealized gains or losses resulting from changes in the foreign
exchange rate on investments from fluctuations arising from changes in the
market prices of the securities. Such gains and losses are included with the
net realized and unrealized gain or loss on investments. Net realized gains
and losses on foreign currency transactions represent net exchange gains or
losses on closed forward currency contracts, disposition of foreign currencies
and the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized appreciation and
depreciation of assets and liabilities in foreign currencies arise from
changes in the value of open forward currency contracts and assets and
liabilities other than investments at the period end, resulting from changes
in the exchange rate.
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 period ended January 31, 1998, 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 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, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion, and
0.43% 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, 1998, fund expenses were reduced by
$1,592,137 under expense offset arrangements with PFTC. 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 $13,060 has
been allocated to the fund, and an additional fee for each Trustee's meeting
attended. Trustees who are not interested persons of Putnam Management and who
serve on committees of the Trustees receive additional fees for attendance at
certain committee meetings.
The fund 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 in the fund and are
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
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services 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%, and 1.00% of the average net
assets attributable to class A, class B, and class M shares, respectively. The
Trustees currently limit payment by the fund to an annual rate of 0.25%, 1.00%
and 0.75% of the average net assets attributable to class A, class B, and
class M shares, respectively.
For the six months ended January 31, 1998, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $2,592,061 and $64,139 from the
sale of class A and class M shares, respectively and received $3,353,985 in
contingent deferred sales charges from redemptions of class B shares. A
deferred sales charge of up to 1% is assessed on certain redemptions of class
A shares. For the six months ended January 31, 1998, Putnam Mutual Funds
Corp., acting as underwriter received $29,148 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended January 31, 1998, purchases and sales of
investment securities other than short-term investments aggregated
$6,112,945,824 and $5,902,267,623, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or loss on
securities sold, the cost of securities has been determined on the identified
cost basis.
Note 4
Capital shares
At January 31, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
January 31, 1998
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 82,978,374 $1,611,681,150
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 37,006,049 676,469,775
- ------------------------------------------------------------
119,984,423 2,288,150,925
Shares
repurchased (72,212,691) (1,406,542,975)
- ------------------------------------------------------------
Net increase 47,771,732 $881,607,950
- ------------------------------------------------------------
Year ended
July 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 234,017,903 $3,953,449,438
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 32,563,535 527,855,140
- ------------------------------------------------------------
266,581,438 4,481,304,578
Shares
repurchased (160,170,443) (2,692,322,364)
- ------------------------------------------------------------
Net increase 106,410,995 $1,788,982,214
- ------------------------------------------------------------
Six months ended
January 31, 1998
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 42,066,932 $777,086,586
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 20,773,118 359,581,843
- ------------------------------------------------------------
62,840,050 1,136,668,429
Shares
repurchased (22,307,562) (411,084,107)
- ------------------------------------------------------------
Net increase 40,532,488 $725,584,322
- ------------------------------------------------------------
Year ended
July 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 105,067,672 $1,702,505,550
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 16,881,432 261,999,265
- ------------------------------------------------------------
121,949,104 1,964,504,815
Shares
repurchased (41,818,952) (673,171,844)
- ------------------------------------------------------------
Net increase 80,130,152 $1,291,332,971
- ------------------------------------------------------------
Six months ended
January 31, 1998
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 4,657,881 $89,953,929
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 842,424 15,146,869
- ------------------------------------------------------------
5,500,305 105,100,798
Shares
repurchased (1,816,193) (34,858,904)
- ------------------------------------------------------------
Net increase 3,684,112 $70,241,894
- ------------------------------------------------------------
Year ended
July 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 7,188,244 $121,126,210
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 474,478 7,605,878
- ------------------------------------------------------------
7,662,722 128,732,088
Shares
repurchased (2,432,366) (40,629,278)
- ------------------------------------------------------------
Net increase 5,230,356 $88,102,810
- ------------------------------------------------------------
Six months ended
January 31, 1998
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 14,550,764 $289,896,639
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,945,854 73,035,441
- ------------------------------------------------------------
18,496,618 362,932,080
Shares
repurchased (7,099,831) (139,531,578)
- ------------------------------------------------------------
Net increase 11,396,787 $223,400,502
- ------------------------------------------------------------
Year ended
July 31, 1997
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 31,072,579 $513,070,605
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,185,837 52,119,074
- ------------------------------------------------------------
34,258,416 565,189,679
Shares
repurchased (25,162,721) (438,572,395)
- ------------------------------------------------------------
Net increase 9,095,695 $126,617,284
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Note 5
Transactions with Affiliated Issuers
Transactions during the year with companies in which the fund owns at least 5%
of the voting securities were as follows:
<S> <C> <C> <C> <C>
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- ------------------------------------------------------------------------------------------------
Name of Affiliates
- ------------------------------------------------------------------------------------------------
Geoworks $ -- 2,730,587 $ -- $ 3,826,409
Industri-Matematik Intl Corp. 22,132,472 -- -- 28,707,000
LifeCore Biomedical, Inc. -- -- -- 11,359,000
Petco Animal Supplies, Inc. -- -- -- 23,890,658
Starbucks Corp. 24,342,607 -- -- 189,433,969
TMP Worldwide, Inc. -- -- -- 10,768,041
WestWood One, Inc. -- -- -- 67,502,500
- -------------------------------------------------------------------------------------------------
Totals $46,475,079 $2,730,587 $ -- $335,487,577
- -------------------------------------------------------------------------------------------------
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
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
John J. Morgan, Jr.
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Roland W. Gillis
Vice President and Fund Manager
Charles H. Swanberg
Vice President and Fund Manager
Robert R. Beck
Vice President and Fund Manager
Michael E. Nance
Vice President and Fund Manager
Michael Stack
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Voyager Fund. It
may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details of sales charges, investment
objectives, and operating policies of the fund, and the most recent copy of
Putnam's Quarterly Performance Summary. For more information or to request a
prospectus, call toll free: 1-800-225-1581. You can also learn more at Putnam
Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution; are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board, or any other agency;
and involve risk, including the possible loss of 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
- --------------------
SA016 40520-007/883/530 3/98
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ------------------------------------------------------------------------
Putnam Voyager Fund
Supplement to Report dated 1/31/98
The following information has been prepared to provide class Y
shareholders with a performance overview specific to their holdings.
Class Y shares are offered exclusively to defined contribution plans
investing $250 million or more in one or more of Putnam's funds or
private accounts. Performance of class Y shares, which incur neither a
front-end load, distribution fee, nor contingent deferred sales charge,
will differ from performance of class A, B, and M shares, which are
discussed more extensively in the report.
RESULTS AT A GLANCE
- ------------------------------------------------------------------------
Total return for periods ended 1/31/98: NAV
4.09%
1 year 20.69
Five years 139.15
Annual average 19.05
10 years 474.38
Annual average 19.10
Life of fund
Annual average 14.09
(since class A inception, 4/1/69)
- ------------------------------------------------------------------------
Share value: NAV
7/31/97 $19.70
1/31/98 $19.25
- ------------------------------------------------------------------------
Distributions: No. 1 Income 0.00 Capital gains Total
Short term .096 1.207
Long term 1.111
- ------------------------------------------------------------------------
Please note that past performance does not indicate future results.
Investment return and principal value will fluctuate so your shares,
when redeemed, may be worth more or less than their original cost. See
full report for information on comparative benchmarks. If you have
questions, please consult your fund prospectus or call Putnam toll free
at 1-800-752-9894.
</TABLE>
