Putnam
Voyager
Fund
ANNUAL REPORT
July 31, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Given the eight-year run of this bull market and the fantastic rise in
general equity prices, it would not be unrealistic to expect that the
market may pause in the next 3 to 6 months. If a correction does occur
-- however nerve-racking it may be -- our outlook for equities would not
be necessarily pessimistic. On the contrary, there are forces at work in
the domestic economy that on the fundamental level bode well for U.S.
companies over the long term. Indeed, for every potential negative there
exists a potential positive."
-- Roland W. Gillis, manager
Putnam Voyager Fund
* "Federal Reserve Board Chairman Alan Greenspan says the economy is 'as
impressive as any I have witnessed in my near half-century.' That's right:
Worry all you want, but the country's most powerful economic manager isn't
afraid we're on the edge of a recession."
-- Fortune, August 17, 1998
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
14 Portfolio holdings
25 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
During the fiscal year ended July 31, 1998, Putnam Voyager Fund's ability
to diversify among large-, middle-, and small-company stocks proved to be
a valuable asset. By investing selectively in the market-driving sectors
of all three portfolio segments, your fund's management team provided yet
another year of outstanding performance.
The digital revolution, the introduction of an exciting new array of
pharmaceuticals, consumers' eagerness to open their pocketbooks, and the
changing shape of financial services in the face of megamergers provided
investment themes for your fund during the period. Semiconductor sales
were soft, but the computer software, cable TV, and telecommunications
industries flourished as the world continued to become wired. Drug
companies prospered as an eager populace increased its spending on
medicines for better health and improved quality of life. Full-service
conglomerates began offering one-stop shopping for financial products.
On the following pages, your fund's management team discusses its
strategies during fiscal 1998 and the prospects for the year ahead in this
still unsettled environment.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
September 19, 1998
Report from the Fund Managers
Roland W. Gillis
Charles H. Swanberg
Robert R. Beck
Michael P. Stack
Michael E. Nance
Like a seasoned prizefighter, the broad U.S. stock market bounced back
from the ropes more than once during the 12 months ended July 31, 1998.
The market's resilience withstood heavy blows from the fallout of Asia's
economic and currency crisis that has sparked considerable concerns about
U.S. corporate earnings, the health of the domestic economy, and the
direction of inflation. Against this unsettled backdrop, Putnam Voyager
Fund stayed on track with its strategy of diversifying among small-,
medium-, and large-company stocks and posted competitive returns for
fiscal 1998.
In all three of your fund's stock segments, the drivers of performance
throughout the fiscal year were holdings in the telecommunications, media,
financial, and specialty retailing industries. At net asset value, the
fund's class A shares closed the period with gains of 16.83% (10.11% at
POP). More in-depth performance information is provided on pages 9 and 10
of this report.
* RESILIENCE IS WATCHWORD
When Asia's financial and political turmoil came to a head last October,
securities markets around the world plummeted and all the major U.S. stock
indexes suffered their biggest one-day point declines in history. The U.S.
market caught its breath shortly thereafter, however, and rebounded into
record-high territory. In the early months of 1998, after the Asian
situation appeared to have settled down somewhat, the rioting in
Indonesia, Japan's ongoing banking problems, and the yen's continued
weakness gave the markets another jolt. Nevertheless, U.S. stocks
recovered with aplomb and the Dow Jones Industrial Average soared past
9300 by mid July. Indeed, the resiliency of U.S. equity prices has been
the hallmark of this bull market.
As this report is written, the markets are once again under pressure.
While small-capitalization stocks are experiencing the worst of the
downdraft (as they have throughout the other bouts of volatility this past
year), midsize- and large-company stocks are not escaping unscathed. No
one can predict the outcome, of course, but your fund is holding a steady
course, as it has in the past, by targeting well-researched growth stocks
of varying sizes that we believe have the potential to produce
considerable gains over time.
* TELECOMMUNICATIONS AND MEDIA OPPORTUNITIES ABOUND AS DIVIDING LINES BLUR
The rapid development of telecommunications technology worldwide and the
relatively recent deregulation have created a host of growth opportunities
for your fund. During the fiscal year, we tried to find as many ways as
possible to take advantage of the digital revolution through participation
in the dynamic growth prospects of telecom equipment suppliers, service
providers, and computer networking organizations. As the lines between the
telecommunications, cable/media, and computer industries continue to blur
and new technologies lend themselves to the cross-pollination of these
industries, the payoff for identifying the dominant players has been
substantial and we believe it should continue to be so.
[GRAPHIC OMITTED: horizontal bar chart of TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Retail 12.3%
Computer
software 7.1%
Pharmaceuticals
and biotechnology 6.7%
Broadcasting 5.8%
Computer
services 5.1%
Footnote reads:
*Based on net assets as of 7/31/98. Holdings will vary over time.
Notable fund performers included America Online; Tele-Communications,
Inc., a cable operator acquired by AT&T in a $48 billion deal; and
Chancellor Media Corporation, formed in September through the merger of
Chancellor Broadcasting and Evergreen Media Corporation (two existing fund
holdings). MediaOne, Liberty Media, Tele-Communications TCI Ventures,
Ascend Communications, Intermedia, Qwest Communications, and Electronic
Arts also posted handsome gains over the period. While these securities
and others discussed in this report were viewed favorably during the
period, all holdings are subject to review in accordance with the fund's
investment strategy and may vary in the future.
* FINANCIAL STOCKS, SPECIALTY RETAILERS, AND PHARMACEUTICAL FIRMS SERVE
FUND WELL
Several holdings in the financial services, specialty retailing, and
pharmaceutical sectors fueled fund performance throughout the period. Low
interest rates, negligible inflation, and a high level of consumer
confidence -- which together translated into consumer spending -- created an
ideal environment for many financial companies and specialty retailers. In
addition, steady consolidation and merger activity lent further support to
the fund's banking, insurance, and security-industry holdings. Top
performers included BankAmerica and NationsBank (which are now merging) as
well as Morgan Stanley, Merrill Lynch, American Express, and AIG.
On the retailing side, stellar performers for the year included those
companies that have carved a unique niche for themselves, thereby
positioning their businesses to grow despite the vagaries of the economy.
TJX Companies, Costco, Dayton Hudson, Office Depot, Kohl's, Starbucks,
Home Depot, Dollar General, Bed Bath and Beyond, and Dollar Tree were
among the fund's standouts in this area.
Large, multinational drug companies also continued to capture investor
interest during the year and performed exceedingly well as demographic
trends, ongoing consolidation, and a more accommodative FDA-approval
process helped the dramatic increase in new-product introductions. We
believe the growth potential of several fund holdings, such as
Warner-Lambert and Pfizer, may well outstrip that of the general equity
market over time.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Tele-Communications TCI Ventures Group
Telecommunications
CBS Corporation
Broadcasting
MediaOne Group, Inc.
Communications
Costco Companies, Inc.
Retail
Clear Channel Communications, Inc.
Broadcasting
American Express Co.
Finance
Tyco International Ltd.
Medical supplies and devices
Tele-Communications, Inc.
Cable television
America Online, Inc.
Internet services
Merck & Co., Inc.
Pharmaceuticals and biotechnology
These holdings represent 17.5% of the fund's net assets as of 7/31/98.
Portfolio holdings will vary over time.
Not to be outdone, holdings in the advertising industry also contributed
significantly to the fund's performance. The very same forces that
propelled retailers also boosted the stock prices of advertising agencies,
outdoor advertising firms, and the media companies that sell advertising
space. Fund holdings such as Clear Channel Communications, widely regarded
as the premier consolidator in radio and billboard advertising; CBS,
formerly Westinghouse Electric; and Interpublic Group and Omnicom Group,
two multinational advertising agencies, were standouts during the period.
* OUTLOOK: CAUTIOUSLY OPTIMISTIC DESPITE CONTINUED TURBULENCE
Our outlook for the next few months is one of cautious optimism. As the
U.S. stock market's recent volatility attests, the world's financial
markets remain vulnerable to Asia's woes and their potentially
far-reaching implications. The ability of U.S. corporations to continue
posting strong earnings gains in the face of lower worldwide demand for
U.S. goods remains to be seen. Therefore, we would not be surprised to see
over the near term a continuation of the market turbulence that ushered
your fund into fiscal 1999, particularly given the late stage of the
current business cycle.
Having said that, however, we are not overly preoccupied with events in
Asia or the current slowing of economic growth. In fact, these forces thus
far have served to keep inflation at bay and the Federal Reserve Board
from raising interest rates. We believe our strategy of focusing on
companies that can exhibit strong earnings momentum at various stages of
development should continue to prove its worth in the months ahead.
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 7/31/98, 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 primarily through common stocks.
TOTAL RETURN FOR PERIODS ENDED 7/31/98
Class A Class B Class M
(inception date) (4/1/69) (4/27/92) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
1 year 16.83% 10.11% 16.02% 11.02% 16.21% 12.12%
- ------------------------------------------------------------------------------
5 years 153.54 139.01 144.28 142.28 147.24 138.53
Annual average 20.45 19.04 19.56 19.36 19.85 18.99
- ------------------------------------------------------------------------------
10 years 493.10 458.99 446.80 446.80 461.94 442.27
Annual average 19.48 18.78 18.52 18.52 18.84 18.42
- ------------------------------------------------------------------------------
Annual average
(Life of fund) 14.25 14.02 13.18 13.18 13.48 13.34
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/98
Standard &
Poor's Russell MidCap Consumer
500 Index Growth Index* Price Index
- ----------------------------------------------------------------------------
1 year 19.29% 8.33% 1.68%
- ----------------------------------------------------------------------------
5 years 180.54 123.34 13.02
Annual average 22.92 17.44 2.48
- ----------------------------------------------------------------------------
10 years 445.10 350.66 37.72
Annual average 18.48 16.25 3.25
- ----------------------------------------------------------------------------
Annual average
(Life of fund) 12.63 N/A+ 5.28
- ----------------------------------------------------------------------------
Past performance is no assurance of future results. 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. 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.
*Putnam Management has recently undertaken a review of benchmarks for
various funds. This index replaces the Standard & Poor's 500 Index as a
performance benchmark for this fund because, in Putnam Management's
opinion, the securities tracked by this index more accurately reflect the
types of securities generally held by the fund.
+The index did not exist at the time of the fund's inception.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of
a $10,000 investment since
7/31/88
Fund's class A S&P 500 Russell MidCap Consumer Price
Date shares at POP Index Growth Index Index
7/31/88 9,425 10,000 10,000 10,000
7/31/89 12,497 13,193 12,667 10,498
7/31/90 13,097 14,051 13,413 11,004
7/31/91 16,247 15,843 15,972 11,494
7/31/92 18,422 17,870 17,819 11,857
7/31/93 22,048 19,430 20,178 12,187
7/31/94 23,259 20,432 21,235 12,524
7/31/95 31,333 25,767 27,767 12,870
7/31/96 36,187 30,037 29,780 13,249
7/31/97 47,846 45,698 41,600 13,545
7/31/98 $55,899 $54,510 $45,066 $13,772
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B shares would have
been valued at $54,680 and no contingent deferred sales charges would
apply; a $10,000 investment in the fund's class M shares would have been
valued at $56,194 ($54,227 at public offering price).
PRICE AND DISTRIBUTION INFORMATION
12 months ended 7/31/98
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
- ----------------------------------------------------------------------
7/31/98 21.36 22.66 20.14 20.93 21.69
- ----------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 6/30/98
(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
- ------------------------------------------------------------------------------
1 year 32.14% 24.51% 31.15% 26.15% 31.48% 26.89%
- ------------------------------------------------------------------------------
5 years 167.99 152.64 158.16 156.16 161.48 152.36
Annual average 21.79 20.37 20.89 20.70 21.20 20.34
- ------------------------------------------------------------------------------
10 years 497.18 462.84 450.52 450.52 466.00 446.19
Annual average 19.57 18.86 18.60 18.60 18.93 18.50
- ------------------------------------------------------------------------------
Annual average
(Life of fund) 14.45 14.22 13.38 13.38 13.68 13.54
- ------------------------------------------------------------------------------
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 5.75% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B 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
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Standard & Poor's 500 Index* is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance.
Russell MidCap Growth Index* measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth
Index.
*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.
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Strategic Income Fund *
High Quality Bond Fund +
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Total Return Fund
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Money Market Fund **
Intermediate U.S. Government
Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund **
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, New York,
Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK]
California, New York
LIFESTAGE SM FUNDS
Putnam Asset Allocation Funds -- three investment
portfolios that spread your money across a variety of
stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
+ Formerly Putnam Federal Income Trust
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is neither
insured nor guaranteed by the U.S. government.
These funds are managed to maintain a price
of $1.00 per share, although there is no
assurance that this price will be maintained
in the future.
Please call your financial advisor or Putnam
at 1-800-225-1581 to obtain a prospectus for
any Putnam fund.It contains more complete
information, including charges and expenses.
Please read it carefully before you invest or
send money.
Report of independent accountants
For the fiscal year ended July 31, 1998
To the Trustees and Shareholders of
Putnam Voyager Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned, and the related statements
of operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of Putnam
Voyager Fund (the "fund") at July 31, 1998, and the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of investments owned at July 31, 1998 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 14, 1998
<TABLE>
<CAPTION>
Portfolio of investments owned
July 31, 1998
COMMON STOCKS (96.0%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Advertising (1.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,478,731 Lamar Advertising Co. (NON) $ 56,284,199
1,910,764 Omnicom Group, Inc. 100,315,110
6,041,469 Outdoor Systems, Inc. (NON) 154,057,460
--------------
310,656,769
Aerospace and Defense (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
542,045 Orbital Sciences Corp. (NON) 14,770,726
Apparel (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
389,836 Gucci Group N.V. (Netherlands) 18,955,776
57,600 Jones Apparel Group, Inc. (NON) 1,504,800
1,434,000 Nike, Inc. 63,813,000
1,175,133 Stage Stores, Inc. (NON) 29,892,446
--------------
114,166,022
Automotive (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,745,015 Republic Industries, Inc. (NON) 57,645,315
1,631,100 Snap-On Inc. 57,904,050
--------------
115,549,365
Banks (4.6%)
- --------------------------------------------------------------------------------------------------------------------------
3,347,100 Banc One Corp. 173,003,231
2,400,000 BankAmerica Corp. 215,400,000
2,628,150 Fifth Third Bancorp 163,602,338
1,257,300 First Chicago NBD Corp. 105,377,456
1,428,300 First Union Corp. 86,055,075
1,391,900 Firstar Corp. 69,508,006
562,600 NationsBank Corp. 44,867,350
1,053,400 PNC Bank Corp. 56,817,763
3,783,525 Washington Mutual, Inc. 151,104,530
--------------
1,065,735,749
Broadcasting (5.8%)
- --------------------------------------------------------------------------------------------------------------------------
14,367,380 CBS Corp. 487,592,959
4,801,446 Chancellor Media Corp. (NON) 231,669,770
7,228,390 Clear Channel Communications, Inc. (NON) 406,145,163
1,036,181 Heftel Broadcasting Corp. Class A (NON) 42,224,376
2,859,330 Sinclair Broadcast Group, Inc. Class A (NON) 74,878,704
1,080,100 Univision Communications Inc. Class A (NON) 39,423,650
2,015,000 WestWood One, Inc. (NON) (AFF) 50,375,000
--------------
1,332,309,622
Building Products (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
2,900,000 Masco Corp. 82,831,250
Business Equipment and Services (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
794,134 Renaissance Worldwide, Inc. (NON) 12,011,277
Business Services (4.8%)
- --------------------------------------------------------------------------------------------------------------------------
308,869 Abacus Direct Corp. (NON) 13,281,367
1,476,619 Accustaff, Inc. (NON) 34,885,124
616,545 Affiliated Computer Services, Inc. Class A (NON) 22,349,756
11,952,795 Cendant Corp. (NON) 206,932,763
2,214,300 Cintas Corp. 112,514,119
1,374,526 Interim Services Inc. (NON) 35,737,676
1,608,479 Interpublic Group of Cos., Inc. 96,910,860
744,075 Metamor Worldwide, Inc. (NON) 24,740,494
534,700 NOVA Corp./Georgia (NON) 17,478,006
1,410,953 Paychex, Inc. 57,055,392
32,693,074 Rentokil Group PLC (United Kingdom) 208,084,877
2,659,336 Robert Half International, Inc. (NON) 141,609,642
356,500 Select Appointments Holdings PLC ADR (United Kingdom) 11,853,625
2,469,773 Serco Group PLC (United Kingdom) (NON) 58,364,095
1,629,453 Snyder Communications, Inc. (NON) 73,223,544
--------------
1,115,021,340
Cable Television (2.7%)
- --------------------------------------------------------------------------------------------------------------------------
1,038,400 Comcast Corp. Class A 47,149,850
3,621,100 Tele-Comm Liberty Media Group, Inc. Class A (NON) 142,807,131
8,549,301 Tele-Communications, Inc. Class A (NON) 356,933,317
2,416,500 USA Networks, Inc. (NON) 70,682,625
--------------
617,572,923
Communications (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
8,659,050 MediaOne Group Inc. (NON) 418,340,353
Computer Equipment (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
2,758,900 Compaq Computer Corp. 90,698,838
Computer Services (5.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,952,746 America Online, Inc. (NON) 345,471,282
411,000 Applied Graphics Technologies, Inc. (NON) 21,217,875
2,593,864 Capita Group PLC (United Kingdom) 25,441,448
713,018 CBT Group PLC (Ireland) (NON) 41,355,044
384,653 CheckFree Holdings Corp. (NON) 9,520,162
3,574,300 Electronic Data Systems Corp. 125,770,681
2,339,157 EMC Corp. (NON) 114,618,693
1,252,100 Galileo International, Inc. (NON) 51,492,613
1,598,700 Getronics Electric N.V. (Netherlands) 89,029,402
817,940 IDT Corp. (NON) 19,835,045
3,071,108 Keane, Inc. (NON) (AFF) 165,455,944
412,155 Misys PLC (United Kingdom) (NON) 19,674,631
3,429,370 Sterling Commerce, Inc. (NON) 135,674,451
105,100 Whittman-Hart, Inc. (NON) 4,841,169
--------------
1,169,398,440
Computer Software (7.1%)
- --------------------------------------------------------------------------------------------------------------------------
3,421,886 BMC Software, Inc. (NON) 168,741,753
3,450,654 Cadence Design Systems, Inc. (NON) 99,421,968
731,793 Cerner Corp. (NON) 20,764,627
6,161,615 Computer Associates Intl., Inc. 204,488,598
4,246,016 Compuware Corp. (NON) 228,488,736
3,128,890 Electronic Arts, Inc. (NON) (AFF) 158,497,834
728,600 Gateway 2000, Inc. (NON) 39,344,400
1,786,529 Intuit, Inc. (NON) 88,879,818
144,000 Legato Systems, Inc. (NON) 6,264,000
1,369,800 Lernout & Hauspie Speech Products N.V. (Belgium) (NON) 70,715,925
1,965,538 Microsoft Corp. (NON) 216,086,334
8,734,764 Parametric Technology Corp. (NON) 119,011,160
645,000 PLATINUM Technology Inc. (NON) 20,377,969
668,500 Saville Systems Ireland PLC ADR (Ireland) (NON) 16,879,625
9,164,000 SEMA Group PLC (United Kingdom) (NON) 110,671,795
1,339,054 Synopsys, Inc. (NON) 50,884,052
195,523 Viasoft, Inc. (NON) 2,517,359
--------------
1,622,035,953
Computers (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
335,100 IBM Corp. 44,400,750
Consumer Services (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
3,065,850 The ServiceMaster Co. 104,238,900
Containers (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
399,500 Owens-Illinois, Inc. (NON) 17,627,938
Cosmetics (--%)
- --------------------------------------------------------------------------------------------------------------------------
417,346 ThermoLase Corp. (NON) 2,008,478
Education Services (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
628,906 Apollo Group, Inc. Class A (NON) 22,562,003
Electric Utilities (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
324,200 CalEnergy, Inc. (NON) 8,814,188
843,000 Duke Energy Corp. 48,156,375
--------------
56,970,563
Electronic Components (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
734,000 Metromedia Fiber Network, Inc. Class A (NON) 41,195,750
691,754 Sanmina Corp. (NON) 31,561,276
--------------
72,757,026
Electronics (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
436,905 Uniphase Corp. (NON) 21,845,250
399,864 Waters Corp. (NON) 25,541,314
--------------
47,386,564
Electronics and Electrical Equipment (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
574,600 American Power Conversion Corp. (NON) 18,530,850
2,883,600 General Electric Co. 257,541,525
826,800 Sipex Corp. (NON) 15,244,125
684,936 Solectron Corp. (NON) 32,876,928
1,947,100 Thermo Instrument Systems, Inc. (NON) 38,942,000
--------------
363,135,428
Energy-Related (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
4,647,226 Thermo Electron Corp. (NON) 106,886,198
Entertainment (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
607,098 Coach USA, Inc. (NON) 22,652,344
Environmental Control (1.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,189,700 Allied Waste Industries, Inc. (NON) 33,609,025
3,866,700 Republic Services, Inc. (NON) 96,667,500
3,301,438 Waste Management, Inc. (NON) 181,991,770
--------------
312,268,295
Finance (4.9%)
- --------------------------------------------------------------------------------------------------------------------------
3,595,510 American Express Co. 396,854,416
4,205,160 Fannie Mae 260,719,920
4,769,877 Federal Home Loan Mortgage Corp. 225,376,688
403,800 Merrill Lynch & Co., Inc. 39,370,500
1,446,800 Morgan Stanley, Dean Witter, Discover and Co. 125,962,025
2,862,542 TCF Financial Corp. 82,655,900
--------------
1,130,939,449
Financial Services (2.5%)
- --------------------------------------------------------------------------------------------------------------------------
1,134,828 AMRESCO, Inc. (NON) 32,413,525
1,391,600 Associates First Capital Corp. 108,109,925
719,577 Concord EFS, Inc. (NON) 17,629,637
1,271,600 Finova Group, Inc. 77,488,125
885,057 FIRSTPLUS Financial Group, Inc. (NON) 34,517,223
3,132,200 MBNA Corp. 104,928,700
1,064,700 Providian Financial Corp. 83,645,494
741,600 Sirrom Capital Corp. 11,541,150
736,900 Star Banc Corp. 51,490,888
630,200 The Equitable Companies, Inc. 47,304,388
--------------
569,069,055
Food and Beverages (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
2,435,600 Coca-Cola Enterprises, Inc. 80,222,575
707,400 PepsiCo, Inc. 27,455,963
3,927,625 Sara Lee Corp. 196,872,203
4,197,600 Whitman Corp. 88,936,650
--------------
393,487,391
Funeral/Cemetery Services (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,968,198 Stewart Enterprises, Inc. Class A 44,714,998
Gas Pipelines (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
821,400 El Paso Natural Gas Co. 27,927,600
Gas Utilities (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
416,700 Columbia Gas System, Inc. 22,163,231
Health Care (--%)
- --------------------------------------------------------------------------------------------------------------------------
391,300 Concentra Managed Care, Inc. (NON) 8,999,900
Health Care Information Systems (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
4,172,616 HBO & Co. 122,961,778
539,311 IMS Health Inc. 33,875,472
--------------
156,837,250
Health Care Services (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
142,993 ABR Information Services, Inc. (NON) 2,502,378
438,200 CareMatrix Corp. (NON) 11,694,463
2,836,698 HEALTHSOUTH Corp. (NON) 71,272,037
1,353,200 Lincare Holdings, Inc. (NON) 53,789,700
2,315,496 Total Renal Care Holdings, Inc. (NON) 70,477,910
--------------
209,736,488
Hospital Management (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
5,363,543 Health Management Assoc., Inc. (NON) 126,043,249
Insurance (2.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,481,500 AFLAC Inc. 85,301,563
2,741,800 American General Corp. 187,299,213
562,500 American International Group, Inc. 84,832,031
929,500 AON Corp. 63,206,000
773,200 Century Business Services, Inc. (NON) 15,270,700
842,200 Conseco Inc. 35,372,400
--------------
471,281,907
Lodging (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,764,883 Extended Stay America, Inc. (NON) 27,476,025
1,579,400 Prime Hospitality Corp. (NON) 22,407,738
1,684,343 Promus Hotel Corp. (NON) 63,373,405
--------------
113,257,168
Machinery (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
394,906 Sidel S.A. (France) 28,082,204
Medical Management Services (--%)
- --------------------------------------------------------------------------------------------------------------------------
105,200 NCS HealthCare, Inc. Class A (NON) 3,044,225
Medical Supplies and Devices (4.7%)
- --------------------------------------------------------------------------------------------------------------------------
413,300 Baxter International, Inc. 24,694,675
869,100 Bergen Brunswig Corp. Class A 46,007,981
503,258 Centocor, Inc. (NON) 17,739,845
469,235 Henry Schein, Inc. (NON) 22,581,934
1,296,233 Johnson & Johnson 100,133,999
614,000 LifeCore Biomedical, Inc. (NON) (AFF) 7,406,375
1,787,940 Medtronic, Inc. 110,740,534
410,000 Minimed, Inc. (NON) 20,807,500
1,775,956 Omnicare, Inc. 70,261,259
224,000 Sofamor Danek Group, Inc. (NON) 19,068,000
549,225 Steris Corp. (NON) 33,502,725
2,730,157 Stryker Corp. 118,591,195
2,380,632 Sybron International Corp. (NON) 49,398,114
2,403,093 Thermo Cardiosystems, Inc. (NON) (AFF) 44,006,641
415,450 Thermotrex Corp. (NON) 6,906,856
5,784,000 Tyco International Ltd. 358,246,500
510,300 U.S. Surgical Corp. 23,505,694
--------------
1,073,599,827
Networking (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
438,000 CIENA Corp. (NON) 32,439,375
Networking Equipment (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
4,757,955 Ascend Communications, Inc. (NON) 211,580,311
1,165,000 Cabletron Systems, Inc. (NON) 13,470,313
1,039,500 Cisco Systems, Inc. (NON) 99,532,125
994,556 FORE Systems, Inc. (NON) 23,682,865
--------------
348,265,614
Nursing Homes (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,390,800 Health Care & Retirement Corp. (NON) 52,502,700
Office Equipment (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,194,750 Avery Dennison Corp. 68,772,797
3,420,365 Viking Office Products, Inc. (NON) 108,596,589
--------------
177,369,386
Oil and Gas (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
672,850 Camco International, Inc. (AFF) 47,772,350
3,091,128 National-Oilwell, Inc. (NON) (AFF) 65,106,884
1,157,770 Newpark Resources, Inc. (NON) 10,709,373
1,232,166 Schlumberger Ltd. 74,623,053
2,548,900 Total Corp. ADR (France) 145,765,219
2,215,093 Varco International, Inc. (NON) 35,164,601
--------------
379,141,480
Oil Services (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,115,359 BJ Services Co. (NON) 23,492,249
1,308,450 Nabors Industries, Inc. (NON) 22,325,428
442,084 Smith International, Inc. (NON) 11,549,445
--------------
57,367,122
Paper and Forest Products (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
985,400 Fort James Corp. 33,257,250
Pharmaceuticals and Biotechnology (6.7%)
- --------------------------------------------------------------------------------------------------------------------------
2,513,600 American Home Products Corp. 129,450,400
1,290,300 Bristol-Myers Squibb Co. 147,013,556
994,300 Dura Pharmaceuticals, Inc. (NON) 25,603,225
1,415,853 Elan Corp. PLC ADR (Ireland) (NON) 101,941,416
213,882 Gilead Sciences, Inc. (NON) 5,026,227
2,613,550 Merck & Co., Inc. 322,283,384
106,725 Novartis AG ADR (Switzerland) 179,950,804
466,850 Parexel International Corp. (NON) 16,062,558
1,196,100 Pfizer, Inc. 131,571,000
2,705,393 Pharmacia & Upjohn, Inc. 128,167,993
672,724 Quintiles Transnational Corp. (NON) 30,650,987
1,366,100 Schering-Plough Corp. 132,170,175
809,985 Sepracor, Inc. (NON) 43,739,190
280,000 Transkaryotic Therapies, Inc. (Malaysia) (NON) 7,805,000
1,104,121 Vertex Pharmaceuticals, Inc. (NON) 23,048,526
1,414,800 Warner-Lambert Co. 106,905,825
--------------
1,531,390,266
Publishing (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,615,700 Harcourt General, Inc. 91,186,069
797,700 McGraw-Hill, Inc. 65,361,544
488,935 Peterson Companies, Inc. Class A (NON) 15,645,920
1,250,000 Tribune Co. 84,062,500
1,087,023 Wolters Kluwer N.V. (Netherlands) 163,270,422
--------------
419,526,455
Railroads (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,016,400 GATX Corp. 39,004,350
Recreation (--%)
- --------------------------------------------------------------------------------------------------------------------------
240,300 International Speedway Corp. Class A 7,689,600
Restaurants (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
9,433,737 J.D. Wetherspoon PLC (United Kingdom) (NON) 38,489,647
761,700 Landry's Seafood Restaurants, Inc. (NON) 9,140,400
1,324,400 McDonald's Corp. 88,486,475
750,110 Papa Johns International, Inc. (NON) 25,972,559
1,006,400 PizzaExpress PLC (United Kingdom) 12,071,969
--------------
174,161,050
Retail (12.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,577,400 Albertsons, Inc. 75,813,788
1,297,025 Bed Bath & Beyond, Inc. (NON) 55,934,203
871,690 Borders Group, Inc. (NON) 27,349,274
44,100 CompUSA, Inc. (NON) 835,144
863,204 Consolidated Stores Corp. (NON) 29,025,235
7,276,720 Costco Companies, Inc. (NON) 412,953,860
2,921,040 CVS Corp. 119,762,640
3,711,200 Dayton Hudson Corp. 177,441,750
1,143,650 Dollar General Corp. 46,889,650
4,137,783 Dollar Tree Stores, Inc. (NON) (AFF) 187,751,881
925,923 Fred Meyer, Inc. (NON) 40,798,482
3,398,562 General Nutrition Companies, Inc. (NON) 97,283,837
5,063,150 Home Depot, Inc. (The) 212,019,406
5,937,678 Kohls Corp. (NON) 290,946,222
2,989,600 Lowe's Cos., Inc. 115,099,600
1,343,037 Michaels Stores, Inc. (NON) 43,984,462
4,696,400 Office Depot, Inc. (NON) 152,633,000
7,501,664 OfficeMax, Inc. (NON) (AFF) 109,242,982
779,300 Payless Shoesource, Inc. (NON) 44,030,450
1,017,807 Payment Svcs., Inc. (NON) 23,345,948
5,524,300 Rite Aid Corp. 218,209,850
3,944,943 Starbucks Corp. (NON) (AFF) 165,194,486
4,728,200 TJX Cos., Inc. (The) 111,112,698
1,503,340 Williams-Sonoma, Inc. (NON) 49,704,179
--------------
2,807,363,027
Satellite Services (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,404,350 PanAmSat Corp. (NON) 118,564,509
Semiconductors (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
410,782 Galileo Technology Ltd. (Israel) (NON) 4,441,580
528,800 Intel Corp. 44,650,550
2,862,150 Linear Technology Corp. 171,192,345
5,150,104 Maxim Integrated Products Inc. (NON) 164,803,326
367,200 Texas Instruments, Inc. 21,779,550
--------------
406,867,351
Specialty Consumer Products (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
846,593 Central Garden and Pet Co. (NON) 19,577,463
1,188,400 Hillenbrand Industries, Inc. 66,476,125
4,400,990 Luxottica Group SPA ADR (Italy) (AFF) 63,264,231
2,085,100 Mattel, Inc. 80,146,031
--------------
229,463,850
Steel (--%)
- --------------------------------------------------------------------------------------------------------------------------
548,000 Lone Star Technologies, Inc. (NON) 6,952,750
Telecommunication Equipment (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,552,376 Advanced Fibre Communications (NON) 30,950,496
1,158,200 Northern Telecom Ltd. (Canada) 68,044,250
287,800 Oy Nokia AB Class A (Finland) 25,300,280
623,128 P-Com, Inc. (NON) 3,621,932
462,550 Premisys Communications, Inc. (NON) 7,978,988
2,718,821 Qwest Communications International, Inc. (NON) 109,772,396
804,397 Tellabs, Inc. (NON) 60,556,012
--------------
306,224,354
Telecommunications (2.6%)
- --------------------------------------------------------------------------------------------------------------------------
913,377 E. Spire Communications, Inc. (NON) 18,267,540
1,168,083 Global Telesystems Group Inc. (NON) 62,492,439
25,979,108 Tele-Communications TCI Ventures Group Class A (NON) (AFF) 511,463,689
--------------
592,223,668
Telephone Services (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
921,890 Intermedia Communications, Inc. (NON) 34,109,930
1,148,900 MCI Communications Corp. 74,391,275
1,462,700 McLeod, Inc. Class A (NON) 54,668,413
830,495 NEXTLINK Communications, Inc. Class A (NON) 30,832,127
344,400 RSL Communications, Ltd. Class A (NON) 13,603,800
3,064,500 Sprint Corp. 214,515,000
129,780 Tel-Save Holdings, Inc. (NON) 1,622,250
1,531,800 WorldCom, Inc. (NON) 80,993,923
--------------
504,736,718
Wireless Communications (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
1,885,100 Airtouch Communications, Inc. (NON) 110,874,453
1,137,300 American Tower Corp. (NON) 27,295,200
442,543 NEXTEL Communications, Inc. Class A (NON) 11,851,917
---------------
150,021,570
---------------
Total Common Stocks (cost $15,517,478,631) $22,007,709,501
UNITS (--%)(a) (cost $9,204,221)
NUMBER OF UNITS VALUE
- --------------------------------------------------------------------------------------------------------------------------
305,839 ThermoLase Corp. (NON) $ 4,931,654
SHORT-TERM INVESTMENTS (4.3%) (a)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$50,000,000 Ciesco L.p. effective yield of 5.52%, 8/20/98 $ 49,854,320
50,000,000 Corporate Asset Funding effective yield
of 5.51%, 8/11/98 49,923,472
30,000,000 Corporate Receivables Co. effective yield
of 5.54%, 8/26/98 29,884,583
25,000,000 Credit Suisse First Boston effective yield of 5.51%, 9/9/98 24,850,771
50,000,000 Dresdner US Finance Inc. effective yield of 5 1/2%, 9/8/98 49,709,722
40,000,000 Eureka Securitization effective yield of 5.52%, 9/25/98 39,662,667
25,000,000 Falcon Asset Securitization effective yield of 5.54%, 8/21/98 24,923,056
50,000,000 Federal Home Loan Mortgage Corp. effective yield
of 5.46%, 8/13/98 49,909,000
45,000,000 Federal Home Loan Mortgage Corp. effective yield
of 5.45%, 8/28/98 44,815,688
50,000,000 Federal Home Loan Mortgage Corp. effective yield
of 5.44%, 9/30/98 49,546,667
50,000,000 Federal Home Loan Mortgage Corp. effective yield
of 5.44%, 8/27/98 49,803,556
50,000,000 Federal Home Loan Mortgage Corp. effective yield
of 5.43%, 8/31/98 49,773,750
52,265,000 Federal Home Loan Mortgage Corp. effective yield
of 5.425%, 9/25/98 51,831,818
50,000,000 Ford Motor Credit Corp. effective yield of 5 1/2%, 9/8/98 49,709,722
25,000,000 General Electric Capital Corp. effective yield
of 5.53%, 8/31/98 24,884,792
50,000,000 Goldman Sachs Group Cp. effective yield of 5.49%, 11/10/98 49,225,100
25,000,000 GTE Funding Inc. effective yield of 5.55%, 8/4/98 24,988,438
25,000,000 GTE Funding Inc. effective yield of 5.54%, 8/18/98 24,934,597
25,000,000 J.P. Morgan & Co. Inc. effective yield of 5 1/2%, 10/14/98 24,715,125
50,000,000 Merrill Lynch & Co. Inc. effective yield of 5.53%, 8/17/98 49,877,111
50,000,000 MetLife Funding effective yield of 5.51%, 9/21/98 49,609,709
27,220,000 National Rural Utilities effective yield of 5 1/2%, 8/6/98 27,199,207
28,407,000 Windmill Funding effective yield of 5.54%, 9/24/98 28,170,938
20,000,000 Windmill Funding effective yield of 5.54%, 8/26/98 19,923,056
54,939,000 Interest in 750,000,000 joint tri-party repurchase
agreement dated July 31, 1998 with Goldman Sachs & Co.
due August 3, 1998 with respect to various U.S. Treasury
obligations -- maturity value of 54,964,913 for an
effective yield of 5.66% 54,947,138
---------------
Total Short-Term Investments (cost $992,681,014) $ 992,674,003
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $16,519,363,866) (b) $23,005,315,158
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $22,916,651,972.
(b) The aggregate identified cost on a tax basis is $16,562,751,449, resulting in gross unrealized appreciation and
depreciation of $7,324,074,914 and $881,511,205, respectively, or net unrealized appreciation of $6,442,563,709.
(NON) Non-income-producing security.
(AFF) Affiliated Companies (Note 5).
ADR, ADS, GDR or GDS after the name of a foreign holding stands for American Depository Receipts, American
Depository Shares, Global Depository Receipts or Global 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
July 31, 1998
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $16,519,363,866) (Note 1) $23,005,315,158
- -----------------------------------------------------------------------------------------------
Cash 21,369,001
- -----------------------------------------------------------------------------------------------
Dividends and interest and other receivables 8,174,786
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 45,384,780
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 120,455,135
- -----------------------------------------------------------------------------------------------
Total assets 23,200,698,860
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 219,300,564
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 22,301,715
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 27,693,102
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 3,182,354
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 232,816
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 5,096
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 9,812,859
- -----------------------------------------------------------------------------------------------
Other accrued expenses 1,518,382
- -----------------------------------------------------------------------------------------------
Total liabilities 284,046,888
- -----------------------------------------------------------------------------------------------
Net assets $22,916,651,972
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $14,845,443,019
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 1,585,269,592
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 6,485,939,361
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $22,916,651,972
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($13,854,610,660 divided by 648,564,528 shares) $21.36
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $21.36)* $22.66
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($7,263,279,615 divided by 360,663,790 shares)** $20.14
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($322,276,674 divided by 15,394,613 shares) $20.93
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $20.93)* $21.69
- -----------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($1,476,485,023 divided by 68,154,476 shares) $21.66
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended July 31, 1998
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $1,295,571) (including dividend
income of $674,369 from investments in affiliated issuers) (Note 5) $ 118,383,171
- -----------------------------------------------------------------------------------------------
Interest 33,976,515
- -----------------------------------------------------------------------------------------------
Total investment income 152,359,686
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 98,797,484
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 41,112,750
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 444,659
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 60,238
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 31,203,315
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 65,509,897
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 2,070,363
- -----------------------------------------------------------------------------------------------
Reports to shareholders 699,969
- -----------------------------------------------------------------------------------------------
Registration fees 332,624
- -----------------------------------------------------------------------------------------------
Auditing 200,665
- -----------------------------------------------------------------------------------------------
Legal 144,693
- -----------------------------------------------------------------------------------------------
Postage 3,321,849
- -----------------------------------------------------------------------------------------------
Other 1,428,543
- -----------------------------------------------------------------------------------------------
Total expenses 245,327,049
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (4,537,801)
- -----------------------------------------------------------------------------------------------
Net expenses 240,789,248
- -----------------------------------------------------------------------------------------------
Net investment loss (88,429,562)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1, 3 and 5) (including realized
gain of $36,615,080 on sales of investments in affiliated issuers) 2,303,267,163
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (48,294)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the year 30,870
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 891,339,470
- -----------------------------------------------------------------------------------------------
Net gain on investments 3,194,589,209
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,106,159,647
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended July 31
-------------------------------
1998 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (88,429,562)$ (32,079,897)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 2,303,218,869 574,607,164
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets
and liabilities in foreign currencies 891,370,340 3,610,018,684
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,106,159,647 4,152,545,951
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (699,467,888) (548,605,542)
- ---------------------------------------------------------------------------------------------------------------
Class B (385,798,466) (281,238,919)
- ---------------------------------------------------------------------------------------------------------------
Class M (15,960,864) (8,171,341)
- ---------------------------------------------------------------------------------------------------------------
Class Y (73,039,295) (52,119,074)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,892,368,485 3,295,035,279
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 4,824,261,619 6,557,446,354
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 18,092,390,353 11,534,943,999
- ---------------------------------------------------------------------------------------------------------------
End of year (including accumulated net investment loss
of $-- and $17,751 respectively) $22,916,651,972 $18,092,390,353
- ---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.49 $15.73 $14.42 $11.19 $11.02
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04)(c) --(c) (.02)(c) .02 (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 3.12 4.85 2.19 3.72 .65
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 3.08 4.85 2.17 3.74 .63
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51) (.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51) (.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $21.36 $19.49 $15.73 $14.42 $11.19
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 16.83 32.22 15.49 34.72 5.49
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $13,854,611 $11,158,273 $7,332,248 $4,895,180 $3,051,878
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .96 1.02 1.03 1.07 1.10
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.20) -- (.10) .17 (.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 60.04 59.77 57.92 65.43 57.74
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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) 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
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.57 $15.15 $14.01 $10.97 $10.89
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.18)(c) (.12)(c) (.13)(c) (.06) (.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.96 4.63 2.13 3.61 .59
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.78 4.51 2.00 3.55 .54
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.21) (1.09) (.86) (.51) (.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.21) (1.09) (.86) (.51) (.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $20.14 $18.57 $15.15 $14.01 $10.97
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 16.02 31.17 14.70 33.65 4.71
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $7,263,280 $5,664,375 $3,405,318 $1,870,370 $911,069
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.71 1.77 1.78 1.82 1.84
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.95) (.75) (.85) (.58) (.91)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 60.04 59.77 57.92 65.43 57.74
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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) 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
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Dec. 1, 1994+
operating performance 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) (.14)(c) (.08)(c) (.09)(c) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 3.06 4.79 2.18 3.10
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.92 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 $20.93 $19.22 $15.60 $14.37
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 16.21 31.57 14.97 27.42*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $322,277 $208,656 $87,782 $19,004
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.46 1.52 1.50 1.06*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.69) (.50) (.57) (.24)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 60.04 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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) 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
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share March 31, 1994+
operating performance 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) .01(c) .04(c) .02(c) .03 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 3.16 4.90 2.21 3.74 (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 3.17 (.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 $21.66 $19.70 $15.85 $14.48 $11.22
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 17.12 32.56 15.85 34.90 (0.18)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,476,485 $1,061,087 $709,595 $351,817 $82,102
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .71 .77 .77 .83 .31*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .06 .25 .15 .39 (.05)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 60.04 59.77 57.92 65.43 57.74
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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) 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
July 31, 1998
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 approximately eight years,
do not pay a front-end sales charge but pay a higher ongoing distribution
fee than class A shares, and are subject to a contingent deferred sales
charge, if those shares are redeemed within six years of purchase. Class M
shares are sold with a maximum front end sales charge of 3.50% and pay an
ongoing distribution fee that is higher than class A shares but lower than
class B shares. Class Y shares, which are sold at net asset value, are
generally subject to the same expenses as class A shares, class B, and
class M shares, but do not bear a distribution fee. Class Y shares are
sold to defined contribution plans that invest at least $250 million in a
combination of Putnam Funds and 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 consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. 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. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed).
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 year ended July
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. These
differences include temporary and permanent differences of losses on wash
sale transactions and net operating losses. Reclassifications are made to
the fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. For the year ended July 31, 1998, the fund reclassified
$88,447,313 to decrease accumulated net investment loss and $88,881,772 to
decrease paid-in-capital with an increase to accumulated net realized
gains of $434,459. The calculation of net investment income per share in
the financial highlights table excludes these adjustments.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund for
the quarter. Such fee is based on the following annual rates: 0.70% of the
first $500 million of average net assets, 0.60% of the next $500 million,
0.55% of the next $500 million, and 0.50% of 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 year ended July 31, 1998, fund expenses were reduced by $4,537,801
under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the
Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $14,780
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 have approved payment by the fund at an annual
rate of 0.25%, 1.00%, and 0.75% of the average net assets attributable to
class A, class B, and class M shares respectively.
For the year ended July 31, 1998, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $6,011,102 and $142,322 from the
sale of class A and class M shares, respectively and received $7,308,066
in contingent deferred sales charges from redemptions of class B shares. A
deferred sales charge of up to 1% is assessed on certain redemptions of
class A shares. For the year ended July 31, 1998, Putnam Mutual Funds
Corp., acting as underwriter received $60,709 on class A redemptions.
Note 3
Purchase and sales of securities
During the year ended July 31, 1998, purchases and sales of investment
securities other than short-term investments aggregated $12,916,458,062
and $11,975,202,133, 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 July 31, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended
July 31, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 171,955,043 $3,517,913,589
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 37,008,241 676,509,789
- -----------------------------------------------------------------------------
208,963,284 4,194,423,378
Shares
repurchased (132,964,406) (2,708,486,833)
- -----------------------------------------------------------------------------
Net increase 75,998,878 $1,485,936,545
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Year ended
July 31, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 87,432,869 $1,694,803,885
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 20,772,542 359,571,774
- -----------------------------------------------------------------------------
108,205,411 2,054,375,659
Shares
repurchased (52,505,238) (1,023,763,961)
- -----------------------------------------------------------------------------
Net increase 55,700,173 $1,030,611,698
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Year ended
July 31, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 7,899,365 $158,011,193
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
Distributions 842,975 15,156,766
- -----------------------------------------------------------------------------
8,742,340 173,167,959
Shares
repurchased (4,204,444) (84,838,578)
- -----------------------------------------------------------------------------
Net increase 4,537,896 $ 88,329,381
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
Year ended
July 31, 1998
- -----------------------------------------------------------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Shares sold 24,981,685 $517,221,628
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,945,937 73,039,295
- -----------------------------------------------------------------------------
28,927,622 590,260,923
Shares
repurchased (14,640,061) (302,770,062)
- -----------------------------------------------------------------------------
Net increase 14,287,561 $287,490,861
- -----------------------------------------------------------------------------
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 period with companies in which the fund owned at
least 5% of the voting securities were as follows:
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- -------------------------------------------------------------------------------------------------------------------
Name of affiliate
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Camco International Inc. $158,738,358 $120,001,051 $272,559 $ 47,772,350
Dollar Tree Stores Inc. 74,463,820 -- -- 187,751,881
Electronic Arts Inc. 20,869,584 -- -- 158,497,834
Geoworks -- 16,490,381 -- --
Industri-Matematik Intl Corp 22,132,472 22,132,472 -- --
Keane, Inc. -- 8,305,367 -- 165,455,944
LifeCore Biomedical, Inc. -- -- -- 7,406,375
Luxottica Group SPA ADR 23,336,529 -- 401,810 63,264,231
National-Oilwell, Inc. 102,477,055 -- -- 65,106,884
OfficeMax, Inc. 40,663,733 33,349,263 -- 109,242,982
Petco Animal Supplies, Inc. -- 27,001,789 -- --
Starbucks Corp. 34,535,526 50,409,967 -- 165,194,486
TMP Worldwide, Inc. -- 6,539,436 -- --
Tele-Communications
TCI Ventures Group
Class A 183,026,868 -- -- 511,463,689
Thermo Cardiosystems, Inc. 6,885,762 -- -- 44,006,641
WestWood One, Inc. -- -- -- 50,375,000
- -------------------------------------------------------------------------------------------------------------------
Totals $667,129,707 $284,229,726 $674,369 $1,575,538,297
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Federal tax information
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, as amended, the Fund
hereby designates $2,801,256,364 as capital gain, which includes
$1,482,617,493 as 20% capital gain, for its taxable year ended July 31,
1998.
The Form 1099 you receive in January 1999 will show the tax status of all
distributions paid to your account in calendar 1998.
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
INDEPENDENT
ACCOUNTANTS
PricewaterhouseCoopers LLP
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
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Carol McMullen
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 P. Stack
Vice President and Fund Manager
Michael E. Nance
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
- ---------------
AN016 45520-007/883/530/516
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ---------------------------------------------------------------------------
Putnam Voyager Fund
Supplement to Annual Report dated 7/31/98
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 annual report.
ANNUAL RESULTS AT A GLANCE
- ---------------------------------------------------------------------------
Total return
for periods ended 7/31/98: NAV
1 year 17.12%
5 years 156.63
Annual average 20.74
10 years 500.34
Annual average 19.63
Annual average (Life of Fund, 4/1/69) 14.30
Share value: NAV
1/31/98 $19.25
7/31/98 $21.66
- ---------------------------------------------------------------------------
Distributions: No. Income Capital gains Total
1 0.00 1.207 1.207
- ---------------------------------------------------------------------------
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.
