Putnam
Voyager
Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
7-31-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
In a rather rapid succession, equity investors have recently been
subjected to two distinct turns in the stock market. Shifting away from
its narrow growth-oriented bias, the market first experienced a rally in
value-oriented and cyclical stocks; then, more recently, it encountered a
healthy broadening that should present fertile ground for Putnam Voyager
Fund in the months ahead.
In this setting, many opportunities presented themselves, and your fund's
managers with the help of Putnam's extensive research capability sought
many of them out. Fortunately it was not a blind search, for your fund has
a highly developed procedure for identifying potential holdings and
checking them thoroughly.
In the following report, the management team discusses the process in the
context of fiscal 1999's performance and offers its views on the fund's
prospects in the months ahead.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
September 15, 1999
Report from the Fund Managers
Roland W. Gillis
Charles H. Swanberg
Robert R. Beck
Michael Stack
Putnam Voyager Fund continued its successful journey throughout another
year of volatile markets, producing attractive results for its 1999 fiscal
year. In the rapidly changing markets that characterized the 12 months
ended July 31, 1999, stock selection that targeted large, small, and
midsize companies was a key to fund performance. Much of the portfolio's
performance during the fiscal year came from companies in the technology
and communications areas.
Total return for 12 months ended 7/31/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- -------------------------------------------------------------------------
22.40% 15.38% 21.43% 16.43% 21.52% 20.52% 21.83% 17.56%
- -------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods begins on page 6.
* EQUITIES RIDE MARKET ROTATION
Last summer, as your fund began its fiscal year, the market's momentum was
fueled by steady economic growth and investor optimism. The investment
environment was helped by three Federal Reserve Board rate cuts, which
calmed U.S. and global markets alike.
As your fund reached its fiscal midpoint, the Dow Jones Industrial Average
sprinted over the milestone 10,000 mark and large-capitalization stock
prices set new records. For most of the period, however, there was a wide
performance gap between large- and small-cap stocks. The rift between
growth and value stocks increased as well.
As your fund approached the end of its fiscal year, the combination of an
acceleration in economic growth, both in the United States and abroad,
with a sustained increase in interest rates led to a dramatic shift in
investor sentiment and sparked a rapid, widespread market rotation.
Investors sold large-cap growth stocks, which offered more predictable
earnings and which had dominated the market since mid 1994, to buy
economically sensitive cyclical stocks. Money flowed into large-cap value
stocks as well as into mid- and small-cap stocks, and the performance gap
narrowed as the market broadened.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Retail 8.5%
Telephone services 8.2%
Computer software 8.2%
Broadcasting 7.0%
Telecommunications 6.6%
Footnote reads:
*Based on net assets as of 7/31/99. Holdings will vary over time.
Investors also became increasingly convinced that economies outside the
United States, previously perceived as stagnant or even contracting, had
begun to show signs of recovery. Improving global economic conditions,
highlighted by larger-than-expected European interest-rate cuts and the
apparent revival of Asian economies, assured investors that the
international markets' deceleration in profit growth was coming to an end.
Faced with indications of an accelerating U.S. economy, investors
expressed concern that the Fed would initiate a series of interest-rate
hikes. The Fed initiated a modest quarter of a percentage point increase
in June -- the first in two years -- followed by another quarter of a
percentage point increase after your fund's fiscal year came to a close.
* TECHNOLOGY REMAINS A LARGE FOCUS
Your fund's recent strategy has been to focus on companies of all sizes
that we believe are benefiting from the changes brought on by new
technologies, such as the growth of the Internet and telecommunications.
For this reason, technology remains one of the largest industry sectors in
the portfolio. Within this sector, we emphasized communications equipment
and components, taking advantage of the fact that rapid growth in data
communications services is driving demand from all industry suppliers.
QUALCOMM, Inc., a key holding in this area, is a leader in developing and
delivering innovative digital wireless communications products and
services based on the company's code division multiple access (CDMA)
digital technology. The company's major business areas include CDMA
phones, integrated chip sets and system software, technology licensing,
and satellite-based systems. CIO magazine recently named QUALCOMM as a
recipient of the 1999 CIO-100 Award for possessing the strategy, ability,
and drive to prosper well into the next century. The award recognizes
organizations around the world that exemplify the highest level of
operational and strategic excellence.
"[Fund Managers] Gillis and Swanberg look for fast-growing companies, focusing
on small- and mid-cap stocks, respectively. [Fund Manager] Beck follows more
of a growth-at-a-reasonable-price approach, looking for beaten-down large caps
that still have strong growth prospects."
- -- Morningstar Mutual Funds, April 29, 1999
Other noteworthy holdings included Metromedia Fiber Network Inc, Linear
Technology Corp, PMC-Sierra Inc, and Exodus Communications Inc. While
these holdings, along with others discussed in this report, were viewed
favorably at the end of the fiscal period, all are subject to review and
adjustment in accordance with the fund's investment strategy and may vary
in the future.
* MEDIA SECTOR BENEFITS FROM STRONG ECONOMY
The strong economy during your fund's fiscal year along with the Internet
and pharmaceuticals drove demand for advertising. The media sector
represented a significant portion of your fund's portfolio and strength
helped drive fund performance during the period. We concentrated on the
radio, television, billboard, cable, and Internet industries. Among the
sector's better performers were Clear Channel Communications Inc, Liberty
Media Group (owned by AT&T Corp.), and MediaOne Group, Inc.
Clear Channel Communications is a diversified media company that owns or
operates 206 radio stations and 18 domestic television stations and is
engaged in outdoor advertising with 213,566 international display faces.
Clear Channel recently announced plans to invest $15 million in Internet
music network Tunes.com Inc. The deal will give Clear Channel a stake of
less than 20% in Tunes.com after the company's initial public offering.
Tunes.com's Web site includes 1 million song clips, 130,000 album reviews,
and 85,000 artist profiles. At the site viewers can watch live concerts
and music videos, buy CDs, or download near CD-quality digital music.
* CONSUMER SECTOR FOCUSES ON DISCOUNT RETAILERS
Consumer holdings were focused on leading retailers, especially those
serving value-oriented niches. Some specialty discount retailers have
found ways to increase profits while offering reduced prices to consumers.
Costco Companies, Inc. and Kohl's Corporation are two examples of
companies that have recognized that many people in the United States
demand value above service.
"One of our successful strategies during Putnam Voyager Fund's fiscal year
has been to focus on companies of all sizes that we believe are benefiting
from the changes brought on by new technologies, such as the growth of the
Internet and of telecommunications."
- -- Charles H. Swanberg,
Manager, Putnam Voyager Fund
Kohl's Corporation operates family-oriented specialty department stores
primarily in the Midwest and Mid-Atlantic area that feature quality,
moderately priced apparel, accessories, and housewares. A department store
chain of 231 stores, Kohl's announced that it plans to open 55 to 60 new
stores in the year 2000. Of that total, about 38 are planned to open in
the first half with 33 stores in New York, New Jersey, and Connecticut
previously operated in former Caldor locations.
During the period, we reduced your fund's exposure in health care as real
or feared threats of government Medicare/Medicaid reimbursement
regulations continued to affect multiples on these stocks. Business
service holdings were concentrated in computer-related outsourcing
services and transaction processing, both areas of rapid growth.
* PORTFOLIO POSITIONED TO BENEFIT FROM BROADENING MARKET
Although interest-rate fears were beginning to surface as the fiscal year
drew to a close, the Fed's less restrictive tone in recent months shifted
market sentiment toward an expectation of a benign-inflation,
steady-growth environment. As a result, the market has broadened
considerably with nearly all investment styles selling at record levels.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
AT&T Corp.
Telephone services
CBS Corporation
Broadcasting
Tyco International Ltd.
Conglomerates
Microsoft Corporation
Computer software
Motorola, Inc.
Electronics and electrical equipment
MediaOne Group Inc.
Cable television
Kohl's Corporation
Retail
Clear Channel Communications, Inc.
Broadcasting
Linear Technology Corp.
Semiconductors
Costco Companies, Inc.
Retail
Footnote reads:
These holdings represent 22.3% of the fund's net assets as of 7/31/99.
Portfolio holdings will vary over time.
Interest rates have increased in 1999, although the Fed has worked to calm
investor fears about further increases in long-term interest rates. We
will continue to monitor carefully signs of overheated growth or inflation
that could move the Fed back to a restrictive mode. While periods of
market volatility are likely over the near term, the quality and growth
potential of your fund's holdings remain high. This fact gives us
confidence that as the market broadens, the smaller, less liquid,
aggressively positioned stocks in the fund's portfolio may be poised to
outperform the market.
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 7/31/99, 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 capital appreciation primarily through
common stocks.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 7/31/99
Class A Class B Class C Class M
(inception dates) (4/1/69) (4/27/92) (7/26/99) (12/1/94)
NAV POP NAV CDSC NAV CDSC NAV POP
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 22.40% 15.38% 21.43% 16.43% 21.52% 20.52% 21.83% 17.56%
- -----------------------------------------------------------------------------------------
5 years 194.17 177.32 183.29 181.29 183.37 183.37 186.98 176.85
Annual average 24.09 22.63 23.15 22.98 23.16 23.16 23.47 22.59
- -----------------------------------------------------------------------------------------
10 years 447.48 416.00 405.94 405.94 407.57 407.57 420.26 402.06
Annual average 18.53 17.83 17.60 17.60 17.64 17.64 17.93 17.51
- -----------------------------------------------------------------------------------------
Annual average
(life of fund) 14.51 14.29 13.44 13.44 13.65 13.65 13.74 13.61
- -----------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/99
Russell MidCap Consumer
Growth Index price index
- -------------------------------------------------------------------
1 year 21.69% 2.14%
- -------------------------------------------------------------------
5 years 158.26 12.33
Annual average 20.90 2.35
- -------------------------------------------------------------------
10 years 332.96 34.00
Annual average 15.79 2.97
- -------------------------------------------------------------------
Annual average
(life of fund) N/A* 5.17
- -------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 5.75% and
3.50% respectively. Class B share returns for the 1-, 5-, 10-year, and
life-of-fund periods reflect the applicable contingent deferred sales
charge (CDSC), which is 5% in the first year, declines to 1% in the sixth
year, and is eliminated thereafter. Returns shown for class B and class M
shares for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect both the
initial sales charge or CDSC, if any, currently applicable to each class
and in the case of class B and class M shares the higher operating
expenses applicable to such shares. For class C shares, returns for
periods prior to their inception are derived from the historical
performance of class A shares, adjusted to reflect both the CDSC currently
applicable to class C shares, which is 1% for the first year and is
eliminated thereafter, and the higher operating expenses applicable to
class C shares. All returns assume reinvestment of distributions at NAV.
Investment return and principal value will fluctuate so that an investor's
shares when redeemed may be worth more or less than their original cost.
*The Russell MidCap Growth 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 7/31/89
Fund's class A Russell MidCap Consumer price
Date shares at POP Growth Index index
7/31/89 9,425 10,000 10,000
7/31/90 9,876 10,589 10,482
7/31/91 12,252 12,610 10,949
7/31/92 13,892 14,068 11,294
7/31/93 16,628 15,930 11,608
7/31/94 17,541 16,764 11,929
7/31/95 23,630 21,921 12,259
7/31/96 27,291 23,509 12,621
7/31/97 36,084 32,841 12,902
7/31/98 42,157 35,578 13,119
7/31/99 $51,600 $43,296 $13,400
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B or class C shares
would have been valued at $50,594 and $50,757, respectively and no
contingent deferred sales charges would apply; a $10,000 investment in the
fund's class M shares would have been valued at $52,026 ($50,206 at public
offering price).
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 7/31/99
Class A Class B Class C Class M
- -----------------------------------------------------------------------------
Distributions (number) 1 1 -- 1
- -----------------------------------------------------------------------------
Income -- -- -- --
- -----------------------------------------------------------------------------
Capital gains
Long-term $1.562 $1.562 $-- $1.562
- -----------------------------------------------------------------------------
Short-term 0.023 0.023 -- 0.023
- -----------------------------------------------------------------------------
Total $1.585 $1.585 $-- $1.585
- -----------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- -----------------------------------------------------------------------------
7/31/98 $21.36 $22.66 $20.14 -- $20.93 $21.69
- -----------------------------------------------------------------------------
7/26/99* -- -- -- $24.64 -- --
- -----------------------------------------------------------------------------
7/31/99 24.25 25.73 22.57 24.25 23.61 24.47
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 6/30/99 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (4/1/69) (4/27/92) (7/26/99) (12/1/94)
NAV POP NAV CDSC NAV CDSC NAV POP
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 21.28% 14.30% 20.33% 15.33% 20.37% 19.37% 20.67% 16.46%
- ----------------------------------------------------------------------------------------
5 years 212.87 194.94 201.37 199.37 201.12 201.12 205.32 194.76
Annual average 25.62 24.15 24.69 24.52 24.67 24.67 25.01 24.13
- ----------------------------------------------------------------------------------------
10 years 496.39 462.10 451.05 451.05 453.33 453.33 466.49 446.67
Annual average 19.55 18.85 18.61 18.61 18.66 18.66 18.94 18.51
- ----------------------------------------------------------------------------------------
Annual average
(life of fund) 14.67 14.45 13.60 13.60 13.81 13.81 13.90 13.77
- ----------------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns and principal value will fluctuate so that an investor's shares
when sold may be worth more or less than their original cost. See first
page of performance section for performance calculation method.
* Inception date of class C shares.
</TABLE>
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.75% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B or C shares and assumes redemption at the end of
the period. Your fund's class B CDSC declines from a 5% maximum during the
first year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies. The CDSC for class C shares is 1% for one year after
purchase.
Comparative benchmarks
Russell MidCap Growth Index* measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth
Index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities in
the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
A guide to the financial statements
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price is determined. All investment and non-investment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-ended funds, a separate
table is provided for each share class.
Report of independent accountants
For the fiscal year ended July 31, 1999
To the Trustees and Shareholders of
Putnam Voyager Fund
In our opinion, the accompanying statement of assets and liabilities,
including the fund's portfolio, 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, 1999, 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, 1999 by correspondence with the custodian, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 13, 1999
<TABLE>
<CAPTION>
The fund's portfolio
July 31, 1999
COMMON STOCKS (96.9%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Advertising (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,688,731 Lamar Advertising Co. (NON) $ 68,604,697
2,748,300 Omnicom Group, Inc. 194,785,763
7,467,719 Outdoor Systems, Inc. (NON) 249,701,854
391,700 TMP Worldwide Inc. (NON) 18,385,419
--------------
531,477,733
Aerospace and Defense (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
2,127,500 Boeing Co. 96,535,313
Airlines (--%)
- --------------------------------------------------------------------------------------------------------------------------
99,100 Ryanair Holdings, PLC ADR (Ireland) (NON) 5,153,200
Apparel (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,839,100 Nike, Inc. 95,633,200
Banks (3.8%)
- --------------------------------------------------------------------------------------------------------------------------
373,600 Bank of America Corp. 24,797,700
1,335,000 Bank One Corp. 72,840,938
5,136,300 Fifth Third Bancorp 334,180,519
12,988,500 Firstar Corp. 338,512,781
2,289,200 Mercantile Bancorp., Inc. 124,761,400
610,800 Northern Trust Corp. 53,139,600
849,700 SunTrust Banks, Inc. 54,805,650
1,117,000 Washington Mutual, Inc. 38,327,063
621,100 Zions Bancorp 36,023,800
--------------
1,077,389,451
Broadcasting (7.0%)
- --------------------------------------------------------------------------------------------------------------------------
5,225,346 AMFM, Inc. (NON) 274,330,665
17,428,680 CBS Corp. (NON) 765,772,628
597,300 Citadel Communications Corp. (NON) 19,113,600
6,938,558 Clear Channel Communications, Inc. (NON) 482,663,441
683,300 Entercom Communications Corp. (NON) 27,673,650
1,036,181 Hispanic Broadcasting Corp. (NON) 73,763,135
6,104,100 Infinity Broadcating Corp. Class A (NON) 168,244,256
749,130 Sinclair Broadcast Group, Inc. Class A (NON) 14,186,649
1,454,600 Univision Communications Inc. Class A (NON) 100,731,050
2,015,000 WestWood One, Inc. (AFF) (NON) 75,310,625
--------------
2,001,789,699
Business Equipment and Services (3.1%)
- --------------------------------------------------------------------------------------------------------------------------
616,545 Affiliated Computer Services, Inc. Class A (NON) 28,669,343
458,869 AnswerThink Consulting Group, Inc. 37,225,748
9,798,900 Cendant Corp. (NON) 197,202,863
2,570,900 Cintas Corp. 164,858,963
1,444,200 Hewlett-Packard Co. 151,189,688
3,460,300 Interpublic Group Cos. Inc. 145,332,600
194,300 Navigant Consulting, Inc. (NON) 8,209,175
14,667,300 Rentokil Group PLC (United Kingdom) 57,079,265
3,702,500 Serco Group PLC (United Kingdom) (AFF) 81,769,083
760,400 Snyder Communications, Inc. (NON) 14,732,750
--------------
886,269,478
Cable Television (3.0%)
- --------------------------------------------------------------------------------------------------------------------------
706,400 Adelphia Communications Corp. (NON) 43,002,100
366,500 Century Communications Corp. (NON) 16,320,703
2,316,500 Comcast Corp. Class A 89,185,250
411,600 Insight Communications Company, Inc. (NON) 12,296,550
7,267,600 MediaOne Group Inc. (NON) 525,992,550
3,504,100 USA Networks, Inc. (NON) 167,977,794
--------------
854,774,947
Chemicals (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
1,989,800 Hoechst AG (Germany) (NON) 83,893,828
782,500 Rohm & Haas Co. 33,354,063
932,700 Union Carbide Corp. 44,769,600
--------------
162,017,491
Computer Services (2.8%)
- --------------------------------------------------------------------------------------------------------------------------
2,697,673 Capita Group PLC (United Kingdom) 30,477,773
215,000 CMG Information Services, Inc. 19,820,313
1,349,500 Comdisco, Inc. 32,556,688
1,021,600 Comverse Technology, Inc. 77,194,650
261,600 Critical Path, Inc. (NON) 8,763,600
3,284,350 EMC Corp. 198,908,447
1,040,000 E*Trade Group, Inc. 31,330,000
201,900 eBay Inc. 19,723,106
2,923,000 Electronic Data Systems Corp. (NON) 176,293,438
2,067,620 Misys PLC (United Kingdom) 18,338,973
446,900 RealNetworks, Inc. 34,104,056
866,100 USWeb Corp. (NON) 18,133,969
427,900 Verio Inc. (NON) 30,514,619
645,500 VeriSign, Inc. 47,847,688
1,635,200 Whittman-Hart, Inc. 41,391,000
--------------
785,398,320
Computer Software (8.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,031,300 Beyond.com Corp. 24,364,463
643,200 BMC Software, Inc. (NON) 34,652,400
340,000 BroadVision, Inc. (NON) 23,693,750
5,097,200 Computer Associates International, Inc. 233,834,050
1,288,800 Dell Computer Corp. 52,679,700
3,128,890 Electronic Arts, Inc. (AFF) 178,151,174
1,252,100 I2 Technologies, Inc. (NON) 38,502,075
565,100 Infoseek Corp. (NON) 21,509,119
1,161,529 Intuit, Inc. (NON) 95,027,591
333,600 ISS Group, Inc. 7,255,800
1,376,500 Lernout & Hauspie Speech Products N.V. (Belgium) 45,338,469
298,600 Lycos, Inc. 12,335,913
470,000 Macromedia, Inc. (NON) 16,391,250
7,566,700 Microsoft Corp. 649,317,444
6,639,600 Oracle Corp. 252,719,775
13,979,214 Parametric Technology Corp. (AFF) (NON) 197,456,398
1,150,000 Rational Software Corp. (NON) 38,381,250
885,000 Research in Motion Ltd. (Canada) (NON) 20,686,875
209,500 SAP AG (Germany) 69,721,830
623,000 Security First Technologies Corp. 21,727,125
323,300 Softbank Corp. (Japan) 87,553,944
1,902,454 Synopsys, Inc. (NON) 114,503,950
1,490,200 VERITAS Software Corp. 83,637,475
--------------
2,319,441,820
Computers (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
450,750 Gateway, Inc. (NON) 34,341,516
2,579,200 IBM Corp. 324,173,200
--------------
358,514,716
Conglomerates (3.0%)
- --------------------------------------------------------------------------------------------------------------------------
1,426,900 Corning Inc. 99,883,000
6,835,200 Tyco International Ltd. 667,713,600
1,058,200 United Technologies Corp. 70,568,713
--------------
838,165,313
Consumer Non Durables (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
1,291,490 Luxottica Group S.P.A. ADR (Italy) 19,937,377
Consumer Services (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,330,400 At Home Corp. 60,782,650
224,300 SportsLine USA, Inc. (NON) 5,130,863
--------------
65,913,513
Cosmetics (--%)
- --------------------------------------------------------------------------------------------------------------------------
235,003 ThermoLase Corp. (NON) 558,132
Education (--%)
- --------------------------------------------------------------------------------------------------------------------------
432,400 ITT Educational Services, Inc. (NON) 9,729,000
Electric Utilities (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
581,300 CalEnergy Co., Inc. 20,345,500
460,000 Montana Power Co. 31,136,250
--------------
51,481,750
Electronic Components (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,117,400 ASM Lithography Holding N.V. (Netherlands) 67,882,050
310,000 Broadcom Corp. 37,355,000
1,731,100 Jabil Circuit, Inc. 72,814,394
5,872,000 Metromedia Fiber Network, Inc. Class A 188,638,000
1,646,600 Rockwell International Corp. 96,840,663
80,900 STMicroelectronics N.V. ADR (France) 5,703,450
1,272,528 Waters Corp. 76,033,548
--------------
545,267,105
Electronics and Electrical Equipment (5.1%)
- --------------------------------------------------------------------------------------------------------------------------
3,075,900 Applied Materials, Inc. (NON) 221,272,556
1,350,000 Celestica Inc. (Canada) (NON) 61,087,500
600,000 Flextronics International Ltd. 26,925,000
5,946,700 Motorola, Inc. 542,636,375
1,031,754 Sanmina Corp. (NON) 67,386,433
826,800 Sipex Corp. (NON) 13,590,525
1,403,672 Solectron Corp. 90,449,115
2,036,600 Sony Corp. (Japan) 259,578,877
1,080,600 Tandy Corp. 55,448,288
969,760 Teradyne, Inc. (NON) 72,307,730
2,038,800 Thermo Instrument Systems, Inc. (NON) 29,562,600
--------------
1,440,244,999
Energy-Related (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
2,492,300 Thermo Electron Corp. (NON) 42,836,406
Entertainment (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,400,000 Harrah's Entertainment, Inc. (NON) 29,837,500
1,566,150 SFX Entertainment, Inc. Class A 70,183,097
1,030,700 Time Warner, Inc. 74,210,400
1,820,400 Viacom, Inc. Class B 76,343,025
--------------
250,574,022
Financial Services (5.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,714,100 American Express Co. 225,832,675
632,500 Capital One Financial Corp. 29,332,188
6,044,850 Citigroup, Inc. 269,373,628
3,675,877 Concord EFS, Inc. (NON) 125,209,560
2,493,100 Fannie Mae 172,023,900
2,034,300 Federal Home Loan Mortgage Corp. 116,717,963
992,700 Franklin Resources, Inc. 37,846,688
74,500 Goldman Sachs Group, Inc. (The) (NON) 4,791,281
448,100 Knight/Trimark Group, Inc. 18,876,213
2,380,300 MBNA Corp. 67,838,550
792,800 Morgan Stanley, Dean Witter, Discover and Co. 71,451,100
715,900 National Commerce Bancorporation 15,973,519
1,179,000 Providian Financial Corp. 107,289,000
4,064,200 Schwab (Charles) Corp. 179,078,813
3,108,042 TCF Financial Corp. 85,859,660
438,600 TD Waterhouse Group, Inc. (NON) 7,620,675
1,063,800 The Equitable Cos., Inc. 68,349,150
1,253,700 Wells Fargo Co. 48,894,300
--------------
1,652,358,863
Food and Beverages (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,291,200 Coca-Cola Co. 77,875,500
Health Care Information Services (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
226,900 Eclipsys Corp. (NON) 4,041,656
603,200 Medquist, Inc. (NON) 26,163,800
--------------
30,205,456
Health Care Services (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
514,300 CareMatrix Corp. (NON) 5,593,013
1,253,200 Lincare Holdings, Inc. (NON) 37,596,000
575,000 Sunrise Assisted Living, Inc. (NON) 17,357,813
346,300 TLC The Laser Center Inc. (Canada) (NON) 12,596,663
2,226,300 United Healthcare Corp. 135,804,300
--------------
208,947,789
Insurance (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
2,752,900 AFLAC Inc. 127,665,738
1,930,200 American General Corp. (NON) 149,349,225
1,245,650 American International Group, Inc. 144,651,106
919,600 CIGNA Corp. 81,097,225
522,900 Lincoln National Corp. 26,145,000
837,900 Progressive Corp. (The) 107,041,725
--------------
635,950,019
Lodging (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,905,783 Extended Stay America, Inc. (NON) 29,602,664
Medical Supplies and Devices (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
600,000 Bausch & Lomb, Inc. 43,087,500
1,100,000 Biomet, Inc. 40,012,500
614,000 LifeCore Biomedical, Inc. (NON) 5,909,750
3,209,100 Medtronic, Inc. 231,255,769
1,161,500 Stryker Corp. 70,851,500
3,070,632 Sybron International Corp. (NON) 91,543,217
2,093,693 Thermo Cardiosystems, Inc. (AFF) (NON) 20,936,930
--------------
503,597,166
Networking (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
796,500 CIENA Corp. (NON) 26,881,875
1,141,000 Entrust Technologies Inc. (NON) 34,230,000
194,700 Exodus Communications, Inc. 23,376,169
122,000 International Network Services 5,253,625
12,971 Juniper Networks, Inc. (NON) 2,106,977
--------------
91,848,646
Networking Equipment (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
4,498,000 ADC Telecommunications Inc. (NON) 200,161,000
4,192,700 Cisco Systems, Inc. 260,471,488
1,020,000 E-Tek Dynamics, Inc. (NON) 42,776,250
813,400 Network Appliance, Inc. 44,330,300
--------------
547,739,038
Office Equipment (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,263,600 Avery Dennison Corp. 77,553,450
Oil and Gas (3.0%)
- --------------------------------------------------------------------------------------------------------------------------
1,637,500 Chevron, Inc. 149,421,875
5,137,400 Conoco, Inc. 133,893,488
3,014,600 Halliburton Co. 139,048,425
1,080,900 Mobil Corp. 110,522,025
527,100 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 32,153,100
846,900 Schlumberger Ltd. 51,290,381
2,069,200 Unocal Corp. 82,121,375
3,781,700 Williams Cos., Inc. (NON) 159,067,756
--------------
857,518,425
Packaging and Containers (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,872,800 Sealed Air Corp. (NON) 120,327,400
Paper and Forest Products (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
1,070,400 Westvaco Corp. 31,509,900
665,600 Weyerhaeuser Co. 43,056,000
2,452,600 Willamette Industries, Inc. 110,367,000
--------------
184,932,900
Pharmaceuticals and Biotechnology (3.0%)
- --------------------------------------------------------------------------------------------------------------------------
3,147,000 American Home Products Corp. 160,497,000
4,633,706 Elan Corp. PLC ADR (Ireland) 134,667,081
1,884,222 Merck & Co., Inc. 127,538,277
4,103,293 Pharmacia & Upjohn, Inc. 220,808,455
437,800 QLT PhotoTherapeutics Inc. (Canada) (NON) 28,019,200
981,285 Sepracor, Inc. (NON) 72,124,448
280,000 Transkaryotic Therapies, Inc. (Malaysia) (NON) 9,975,000
1,250,921 Vertex Pharmaceuticals, Inc. (NON) 31,585,755
819,900 Warner-Lambert Co. 54,113,400
--------------
839,328,616
Publishing (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
106,100 Kadokawa Shoten Publishing Co., Ltd. (Japan) 24,284,267
Recreation (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
394,800 International Speedway Corp. Class A 20,307,525
Restaurants (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
9,433,737 J.D. Wetherspoon PLC (United Kingdom) 48,643,838
1,050,400 PizzaExpress PLC (United Kingdom) 12,731,596
5,297,711 Starbucks Corp. 123,171,781
1,264,800 Tricon Global Restaurants, Inc. (NON) 51,461,550
--------------
236,008,765
Retail (8.5%)
- --------------------------------------------------------------------------------------------------------------------------
280,900 Ames Department Stores, Inc. (NON) 11,516,900
2,594,050 Bed Bath & Beyond, Inc. 88,035,572
6,275,700 Costco Companies, Inc. (NON) 469,108,575
2,085,340 CVS Corp. 103,745,665
4,098,157 Dollar Tree Stores, Inc. (AFF) (NON) 173,403,268
1,277,500 Federated Department Stores, Inc. (NON) 65,551,719
5,097,900 Home Depot, Inc. (The) 325,309,744
6,495,998 Kohls Corp. (NON) 494,101,848
990,900 Lowe's Cos., Inc. 52,269,975
1,919,637 Michaels Stores, Inc. (AFF) (NON) 55,909,428
7,123,600 TJX Cos., Inc. (The) 235,524,025
3,287,800 Wal-Mart Stores, Inc. 138,909,550
4,836,000 Walgreen Co. 136,919,250
1,437,340 Williams-Sonoma, Inc. 53,810,416
711,417 Yankee Candle Company, Inc. (The) (NON) 16,006,883
--------------
2,420,122,818
Semiconductors (6.1%)
- --------------------------------------------------------------------------------------------------------------------------
1,150,000 Analog Devices, Inc. (NON) 49,593,750
2,129,500 Galileo International, Inc. 109,003,781
3,408,600 Intel Corp. 235,193,400
1,098,730 KLA Tencor Corp. (NON) 74,438,958
7,805,382 Linear Technology Corp. (AFF) 479,055,320
5,830,496 Maxim Integrated Products Inc. (NON) 373,516,150
1,258,000 PMC -- Sierra, Inc. 98,438,500
293,000 Rohm Co. Ltd. (Japan) 54,955,097
172,200 SDL, Inc. 11,698,838
1,094,700 Texas Instruments, Inc. 157,636,800
75,200 Vitesse Semiconductor Corp. (NON) 4,803,400
1,608,000 Xilinx, Inc. 100,299,000
--------------
1,748,632,994
Telecommunications (6.6%)
- --------------------------------------------------------------------------------------------------------------------------
1,004,500 Allegiance Telecom, Inc. (NON) 50,538,906
1,414,700 Amdocs Ltd. 37,666,388
150,000 Copper Mountain Networks, Inc. (NON) 18,150,000
1,012,500 Covad Communications Group 144A 46,575,000
933,900 General Instrument Corp. (NON) 42,375,713
798,869 Global Crossing Ltd. 33,153,064
4,518,866 Global TeleSystems Group, Inc. 144,038,854
195,900 Hikari Tsushin, Inc. (Japan) 82,145,509
713,610 JDS Uniphase Corp. 64,492,504
4,264,500 Lucent Technologies, Inc. 277,459,031
3,267,500 MCI WorldCom, Inc. (NON) 269,568,750
1,185,800 NTL Inc. (NON) 123,174,975
7,688,050 Orange PLC ADR (United Kingdom) 122,230,827
1,992,400 Oy Nokia AB Class A, (Finland) 172,697,446
1,531,000 QUALCOMM, Inc. 238,836,000
4,332,300 Telefonaktiebolaget LM Ericsson Class B, (Sweden) 141,362,558
---------------
1,864,465,525
Telephone Services (8.2%)
- --------------------------------------------------------------------------------------------------------------------------
33,828,751 AT&T Corp. 1,251,663,787
890,000 Frontier Corp. 49,339,375
1,434,890 Intermedia Communications, Inc. (NON) 39,549,156
3,649,200 McLeod USA, Inc. Class A 108,791,775
1,648,095 NEXTLINK Communications, Inc. Class A (NON) 184,792,652
500,000 RSL Communications, Ltd. Class A 8,562,500
3,319,400 SBC Communications, Inc. 189,828,188
8,273,200 Sprint Corp. (NON) 427,621,025
1,160,000 WinStar Communications. Inc. (NON) 60,900,000
---------------
2,321,048,458
Transportation (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,806,900 FDX Corp. 80,971,706
Wireless Communications (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
5,058,400 American Tower Corp. Class A (NON) 117,291,650
399,400 Pinnacle Holdings Inc. (NON) 9,860,188
587,400 RF Micro Devices, Inc. 44,899,388
3,063,600 Sprint PCS 185,730,750
728,700 Vodafone AirTouch PLC (United Kingdom) 153,391,067
---------------
511,173,043
---------------
Total Common Stocks (cost $18,957,865,672) $27,523,904,018
SHORT-TERM INVESTMENTS (3.3%) (a)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$45,000,000 American General Finance Corp. effective yield of 5.09%,
September 27, 1999 $ 44,637,338
50,000,000 Bank of America Corp. effective yield of 5.12%,
September 21, 1999 49,637,331
50,778,000 Contifinancial Corp. effective yield of 5.2%,
August 18, 1999 50,653,312
50,300,000 Corporate Receivables Corp. effective yield of 5.11%,
September 9, 1999 50,021,548
50,000,000 Eureka Securitization Inc. effective yield of 5.11%,
August 16, 1999 49,893,542
50,000,000 Federal Home Loan Mortgage Corp. effective yield of 4.925%,
September 15, 1999 49,691,250
50,000,000 Ford Motor Credit Corp. effective yield of 5.08%,
August 27, 1999 49,816,556
50,000,000 General Electric Capital Corp. effective yield of 5.03%,
August 23, 1999 49,844,167
45,000,000 International Business Machines Corp. effective yield of 5.08%,
August 12, 1999 44,930,150
50,000,000 J. P. Morgan & Co., Inc. effective yield of 4.94%, August 9, 1999 49,945,111
59,695,000 Preferred Receivables Funding Corp. effective yield of 5.1%,
August 17, 1999 59,559,691
50,000,000 Shell Finance effective yield of 5.11%, August 5, 1999 49,971,611
24,750,000 Sigma Finance Inc. effective yield of 4.82%, August 19, 1999 24,690,353
30,000,000 Sigma Finance Inc. effective yield of 4.86%, October 19, 1999 29,652,325
30,000,000 USAA Capital Corp. effective yield of of 4.78%,
August 27, 1999 29,896,433
50,000,000 Windmill Funding Corp. effective yield of 5.13%,
August 5, 1999 49,971,500
78,282,000 Interest in $600,000,000 joint repurchase agreement
dated July 30, 1999 with Goldman Sachs & Co.
due August 2, 1999 with respect to various U. S. Treasury
obligations -- maturity value $78,314,944 for an effective
yield of 5.05% 78,282,000
131,718,000 Interest in $500,000,000 joint repurchase agreement
dated July 30, 1999 with Lehman Brothers Inc.
due August 2, 1999 with respect to various U. S. Treasury
obligations -- maturity value $131,773,431 for an
effective yield of 5.05% 131,718,000
---------------
Total Short-Term Investments (cost $942,812,218) $ 942,812,218
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $19,900,677,890) (b) $28,466,716,236
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $28,411,633,847.
(b) The aggregate identified cost on a tax basis is $19,970,428,462, resulting in gross unrealized appreciation and
depreciation of $9,168,276,879 and $671,989,105, respectively, or net unrealized appreciation of $8,496,287,774.
(NON) Non-income-producing security.
(AFF) Affiliated Companies (Note 5).
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers.
ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign
securities on deposit with a domestic custodian bank.
- -------------------------------------------------------------------------------
Forward Currency Contracts to Sell at July 31, 1999
Market Aggregate Face Delivery Unrealized
Value Value Date Depreciation
- -------------------------------------------------------------------------------
Japanese Yen $17,068,439 $16,548,042 9/16/99 $(520,397)
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
July 31, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $19,900,677,890) (Note 1) $28,466,716,236
- -----------------------------------------------------------------------------------------------
Cash 166,765
- -----------------------------------------------------------------------------------------------
Foreign currency (cost $7,168,389) 6,616,138
- -----------------------------------------------------------------------------------------------
Dividends and interest and other receivables 6,525,596
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 135,101,521
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 217,680,624
- -----------------------------------------------------------------------------------------------
Total assets 28,832,806,880
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 250,864,805
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 117,898,515
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 33,279,356
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 5,054,425
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 480,385
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 21,721
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 11,475,549
- -----------------------------------------------------------------------------------------------
Payable for open forward currency contracts 520,397
- -----------------------------------------------------------------------------------------------
Other accrued expenses 1,577,880
- -----------------------------------------------------------------------------------------------
Total liabilities 421,173,033
- -----------------------------------------------------------------------------------------------
Net assets $28,411,633,847
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $17,082,901,505
- -----------------------------------------------------------------------------------------------
Undistributed net investment income 520,397
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 2,763,494,871
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 8,564,717,074
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $28,411,633,847
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($17,180,287,753 divided by 708,378,589 shares) $24.25
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $24.25)* $25.73
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($8,433,130,821 divided by 373,570,664 shares)** $22.57
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($821,995 divided by 33,891 shares)** $24.25
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($390,975,269 divided by 16,559,253 shares) $23.61
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $23.61)* $24.47
- -----------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($2,406,418,009 divided by 97,481,163 shares) $24.69
- -----------------------------------------------------------------------------------------------
* 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
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended July 31, 1999
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $1,330,286) (including dividend
income of $3,050,382 from investments in affiliated issuers) (Note 5) $ 116,398,115
- -----------------------------------------------------------------------------------------------
Interest 40,971,529
- -----------------------------------------------------------------------------------------------
Total investment income 157,369,644
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 117,055,103
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 36,743,243
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 398,012
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 63,007
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 37,789,892
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 76,530,540
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 51
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 2,586,337
- -----------------------------------------------------------------------------------------------
Reports to shareholders 354,884
- -----------------------------------------------------------------------------------------------
Registration fees 1,040,800
- -----------------------------------------------------------------------------------------------
Auditing 57,930
- -----------------------------------------------------------------------------------------------
Legal 134,258
- -----------------------------------------------------------------------------------------------
Postage 2,912,842
- -----------------------------------------------------------------------------------------------
Other 2,528,615
- -----------------------------------------------------------------------------------------------
Total expenses 278,195,514
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (4,115,634)
- -----------------------------------------------------------------------------------------------
Net expenses 274,079,880
- -----------------------------------------------------------------------------------------------
Net investment loss (116,710,236)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1, 3 and 5) (including realized
gain of $4,426,259 on sales of investments in affiliated issuers) 3,127,565,011
- -----------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 684,004
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the year (1,309,341)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 2,080,087,054
- -----------------------------------------------------------------------------------------------
Net gain on investments 5,207,026,728
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $5,090,316,492
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended July 31
-------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (116,710,236) $ (88,429,562)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 3,128,249,015 2,303,218,869
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 2,078,777,713 891,370,340
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,090,316,492 3,106,159,647
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (1,042,857,172) (699,467,888)
- ---------------------------------------------------------------------------------------------------------------
Class B (569,436,634) (385,798,466)
- ---------------------------------------------------------------------------------------------------------------
Class M (25,276,938) (15,960,864)
- ---------------------------------------------------------------------------------------------------------------
Class Y (106,713,548) (73,039,295)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,148,949,675 2,892,368,485
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 5,494,981,875 4,824,261,619
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 22,916,651,972 18,092,390,353
- ---------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $520,397 and $--, respectively) $28,411,633,847 $22,916,651,972
- ---------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $21.36 $19.49 $15.73 $14.42 $11.19
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05)(c) (.04)(c) --(c) (.02)(c) .02
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.53 3.12 4.85 2.19 3.72
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.48 3.08 4.85 2.17 3.74
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $24.25 $21.36 $19.49 $15.73 $14.42
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 22.40 16.83 32.22 15.49 34.72
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $17,180,288 $13,854,611 $11,158,273 $7,332,248 $4,895,180
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .90 .96 1.02 1.03 1.07
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.25) (.20) -- (.10) .17
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the 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
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $20.14 $18.57 $15.15 $14.01 $10.97
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.21)(c) (.18)(c) (.12)(c) (.13)(c) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.23 2.96 4.63 2.13 3.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.02 2.78 4.51 2.00 3.55
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $22.57 $20.14 $18.57 $15.15 $14.01
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 21.43 16.02 31.17 14.70 33.65
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $8,433,131 $7,263,280 $5,664,375 $3,405,318 $1,870,370
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.65 1.71 1.77 1.78 1.82
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (1.00) (.95) (.75) (.85) (.58)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the 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 C
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999+
operating performance to July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $24.64
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.39)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.39)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $24.25
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (1.58)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $822
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .03*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.02)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 85.05
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the 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
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $20.93 $19.22 $15.60 $14.37 $11.79
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.16)(c) (.14)(c) (.08)(c) (.09)(c) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.43 3.06 4.79 2.18 3.10
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.27 2.92 4.71 2.09 3.09
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $23.61 $20.93 $19.22 $15.60 $14.37
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 21.83 16.21 31.57 14.97 27.42*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $390,975 $322,277 $208,656 $87,782 $19,004
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.40 1.46 1.52 1.50 1.06*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.75) (.69) (.50) (.57) (.24)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the 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
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $21.66 $19.70 $15.85 $14.48 $11.22
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) --(c) .01(c) .04(c) .02(c) .03
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 4.62 3.16 4.90 2.21 3.74
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 4.62 3.17 4.94 2.23 3.77
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.59) (1.21) (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $24.69 $21.66 $19.70 $15.85 $14.48
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 22.75 17.12 32.56 15.85 34.90
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,406,418 $1,476,485 $1,061,087 $709,595 $351,817
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .65 .71 .77 .77 .83
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) -- .06 .25 .15 .39
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the 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, 1999
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 C, class M and class Y shares. The
fund began offering class C shares on July 26, 1999. Class A shares are
sold with a maximum front-end sales charge of 5.75%. Class B shares, which
convert to class A shares after approximately eight years, do not pay a
front-end sales charge but pay a higher ongoing distribution fee than
class A shares, and are subject to a contingent deferred sales charge, if
those shares are redeemed within six years of purchase Class C shares are
subject to the same fees and expenses as class B shares, except that class
C shares have a one year 1.00% contingent deferred sales charge and do not
convert to class A shares. Class M shares are sold with a maximum front
end sales charge of 3.50% and pay an ongoing distribution fee that is
higher than class A shares but lower than class B shares and class C
shares. Class Y shares, which are sold at net asset value, are generally
subject to the same expenses as class A shares, class B shares, class C
shares, and class M shares, but do not bear a distribution fee. Class Y
shares are sold to defined contribution plans that invest at least $150
million in a combination of Putnam Funds and other accounts managed by
affiliates of Putnam 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, Inc. 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. Discounts on original issue discount
bonds are accreted according to the yield-to-maturity basis.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and 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 realized 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) Forward currency contracts The fund may engage in forward currency
contracts which are agreements between two parties to buy and sell
currencies at a set price on a future date, to protect against a decline
in value relative to the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the
value of a currency in which securities a fund intends to buy are
denominated, when a fund holds cash reserves and short-term investments).
The U.S. dollar value of forward currency contracts is determined using
current forward currency exchange rates supplied by a quotation service.
The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is "marked to market" daily and the change in
market value is recorded as an unrealized gain or loss. When the contract
is closed, the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. The fund could be exposed to risk if
the value of the currency changes unfavorably, if the counterparties to
the contracts are unable to meet the terms of their contracts or if the
fund is unable to enter into a closing position.
G) 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, 1999, the fund had no borrowings against the line of credit.
H) 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.
I) 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, foreign currency gains and losses, book
accretion/amortization 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, 1999, the fund reclassified
$117,230,633 to decrease accumulated net investment loss and $88,508,811
to increase paid-in-capital, with a decrease to accumulated net realized
gains of $205,739,444. 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, 0.43% of the next $5 billion, 0.42% of the next $5 billion,
0.41% of the next $5 billion, 0.40% of the next $5 billion, and 0.39%
thereafter. Prior to February 1, 1999, the management fees were as
follows, 0.70% of the first $500 million of average net assets, 0.60% of
the next $500 million, 0.55% of the next $500 million, 0.50% of the next
$5 billion, 0.475% of the next $5 billion, 0.455% of the next $5 billion,
0.44% of the next $5 billion, and 0.43% thereafter.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the year ended July 31, 1999, fund expenses were reduced by $4,115,634
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 $8,961
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, class C and class M shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam
Investments Inc., for services provided and expenses incurred by it in
distributing shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund to an annual rate of 0.25%, 1.00% and 1.00% and 0.75%
of the average net assets attributable to class A, class B, class C and
class M shares respectively.
For the year ended July 31, 1999, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $5,270,995 and $126,536 from the
sale of class A and class M shares, respectively and received $9,969,527
and no monies in contingent deferred sales charges from redemptions of
class B and class C shares, respectively. A deferred sales charge of up to
1% is assessed on certain redemptions of class A shares. For the year
ended July 31, 1999, Putnam Mutual Funds Corp., acting as underwriter
received $133,652 on class A redemptions.
Note 3
Purchase and sales of securities
During the year ended July 31, 1999, purchases and sales of investment
securities other than short-term investments aggregated $20,783,404,098
and $20,482,538,866, 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, 1999, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended July 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 200,358,574 $4,408,201,255
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 49,587,295 1,006,126,012
- -----------------------------------------------------------------------------
249,945,869 5,414,327,267
Shares
repurchased (190,131,808) (4,190,827,089)
- -----------------------------------------------------------------------------
Net increase 59,814,061 $1,223,500,178
- -----------------------------------------------------------------------------
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, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 80,109,234 $1,644,300,567
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,943,081 530,078,393
- -----------------------------------------------------------------------------
108,052,315 2,174,378,960
Shares
repurchased (95,145,441) (1,953,712,771)
- -----------------------------------------------------------------------------
Net increase 12,906,874 $ 220,666,189
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to July 31, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 33,891 $829,273
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
33,891 829,273
Shares
repurchased -- --
- -----------------------------------------------------------------------------
Net increase 33,891 $829,273
- -----------------------------------------------------------------------------
Year ended July 31, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,906,639 $ 148,886,198
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,234,352 24,453,377
- -----------------------------------------------------------------------------
8,140,991 173,339,575
Shares
repurchased (6,976,351) (150,450,227)
- -----------------------------------------------------------------------------
Net increase 1,164,640 $ 22,889,348
- -----------------------------------------------------------------------------
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, 1999
- -----------------------------------------------------------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Shares sold 45,348,130 $1,048,260,384
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,176,001 106,713,548
- -----------------------------------------------------------------------------
50,524,131 1,154,973,932
Shares
repurchased (21,197,444) (473,909,245)
- -----------------------------------------------------------------------------
Net increase 29,326,687 $ 681,064,687
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Note 5
Transactions with Affiliated Issuers
Transactions during the year with companies in which the fund owned at least
5% of the voting securities were as follows:
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- -------------------------------------------------------------------------------------------------------
Name of affiliate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dollar Tree Stores $ 7,255,931 $ 10,569,079 $ -- $ 173,403,268
Electronic Arts -- -- -- 178,151,174
Linear Technology Corp. 77,218,050 19,769,903 849,773 479,055,320
Luxottica Group SPA ADR 4,596,596 45,983,670 425,734 --
Michaels Stores Inc. 12,937,855 -- -- 55,909,428
National Oilwell, Inc. 2,383,878 104,860,933 -- --
Network Solutions Inc. Class A 64,587,526 64,587,526 -- --
Office Depot Inc. 20,047,719 211,488,119 -- --
OfficeMax, Inc. -- 103,598,641 -- --
Parametric Technology Corp. 90,383,540 46,092,981 -- 197,456,398
Serco Group PLC 26,267,955 -- 338,934 81,769,083
Starbucks Corp. 83,144,567 57,818,539 -- --
Telecom-TCI Ventures
Group Class A 20,502,393 -- -- --
Thermo Cardio Systems, Inc. 1,034,073 14,945,446 -- 20,936,930
WestWood One, Inc. -- -- -- 75,310,625
Wolters Kluwer CTF 33,499,898 145,109,894 1,435,941 --
- --------------------------------------------------------------------------------------------------------
Totals $443,859,981 $824,824,731 $3,050,382 $1,261,992,226
</TABLE>
Federal tax information
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, as amended, the Fund
hereby designates $2,904,913,324 as a capital gain, for its taxable year
ended July 31, 1999.
The fund has designated 77.80% of the distributions from net investment
income as qualifying for the dividends received deduction for
corporations.
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
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 Stack
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam 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' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
AN016-54549 007/883/530/516 9/99
PUTNAM INVESTMENTS [SCALE LOGO OMITTED}
- ----------------------------------------------------------------------------
Putnam Voyager Fund
Supplement to Annual Report dated 7/31/99
The following information has been prepared to provide class Y shareholders
with a performance overview specific to their holdings. Class Y shares are
offered exclusively to defined contribution plans investing $150 million or
more in one or more of Putnam's funds or private accounts. Performance of
class Y shares, which incur neither a front-end load, distribution fee, nor
contingent deferred sales charge, will differ from performance of class A,
B, C, and M shares, which are discussed more extensively in the annual
report.
ANNUAL RESULTS AT A GLANCE
- ----------------------------------------------------------------------------
Total return
for periods ended 7/31/99 NAV
1 year 22.75%
5 years 197.83
Annual average 24.39
10 years 455.76
Annual average 18.71
Life of fund (since class A inception, 4/1/69)
Annual average 14.57
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Share value: NAV
7/31/98 $21.66
7/31/99 $24.69
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Distributions: No. Income Capital gains Total
1 $0.000 1.585 $1.585
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Please note that past performance does not indicate future results. More
recent returns may be more or less than those shown. Returns shown for
class Y shares for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect the initial
sales charge currently applicable to class A shares. These returns have not
been adjusted to reflect differences in operating expenses which, for class
Y shares, are lower than the operating expenses applicable to class A
shares. All returns assume reinvestment of distributions at net asset value.
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.
