[H & M Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
ANNUAL SECURITIES REPORT
(The Fifth Fiscal Year)
From: July 1, 1998
To: June 30, 1999
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
PUTNAM EUROPE GROWTH FUND
SECURITIES REGISTRATION STATEMENT
PUTNAM EUROPE GROWTH FUND
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: December 17, 1999
Name of the Registrant Trust: PUTNAM EUROPE GROWTH FUND
Name of Trustees: George Putnam
John A. Hill
William F. Pounds
Jameson A. 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
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
-------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
---------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
- - ii -
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM EUROPE GROWTH FUND
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 50 million Class M shares.
Foreign Investment Fund Securities Up to the total amount obtained
to be Publicly Offered or Sold: by aggregating the net asset
value per Class M share in
respect of 50 million Class M
shares (The maximum amount
expected to be sold is 1,127
million U.S. dollars
([YEN] 118.335 billion.)
Note 1: U.S. $amount is translated into Japanese Yen at the rate of I
USD= [YEN] 105.00, the mean of the exchange rate quotations by The Bank
of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on October 29, 1999.
Note 2: The maximum amount expected to be sold is an amount calculated by
multiplying the net asset value per Class M share as of October 29,
1999(USD22.54) by 50 million Class M shares for convenience.
Places where a copy of this Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Securities Registration Statement is 19)
C O N T E N T S
Japanese This
Original English
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 4 6
I. DESCRIPTION OF THE FUND 4 6
II. OUTLINE OF THE FUND 4 6
III. OUTLINE OF THE OTHER RELATED COMPANIES 4 6
IV. FINANCIAL CONDITION OF THE FUND 4 6
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 4 6
VI. MISCELLANEOUS 4 6
PART III. SPECIAL INFORMATION 6 8
I. OUTLINE OF THE REGULATORY SYSTEM IN
THE UNITED STATES 6 8
II. FINANCIAL CONDITION OF THE INVESTMENT
MANAGEMENT COMPANY 12 15
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 12 15
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM EUROPE GROWTH FUND
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Four classes of shares (Class A shares,
INVESTMENT FUND Class B shares, Class C shares and Class M
SECURITIES CERTIFICATES: shares) being all registered without par
value. In Japan, Class M shares (all
hereinafter referred to as the "Shares")
are for public offering. No rating has
been acquired.
3. NUMBER OF SHARES TO Up to 50 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by
OFFERING PRICE: aggregating the the respective net asset
value of each Share in respect of 50
million Shares (The maximum amount expected
to be sold is 1,127 million U.S. Dollars
([YEN] 118.335 billion).
Note 1: The maximum amount expected to be sold is the amount calculated, for
convenience, by multiplying the larger of the net asset value per Share
of Class M Shares as of October 29, 1999 ($22.54) by the number of
Shares to be offered (50 million).
Note 2: Dollar amount is translated, for convenience, at the rate of
$1.00= [YEN] 105.00 (the mean of the exchange rate quotations by The
Bank of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on October 29, 1999). The same
applies hereinafter.
Note 3: In this document, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount of the "total column" is
not equal to the aggregate amount. Also, simply multiplying the
corresponding amount makes translation into yen by the conversion rate
specified and rounding up when necessary. As a result, in this
document, there are cases in which Japanese yen figures for the same
information differ from each other.
5. ISSUE PRICE: The Net Asset Value per Share is calculated
the day after the application for purchase
is received by the Fund.
6. SALES CHARGE: Class M Shares:
Sales charge (in Japan) is 3.50% of the net
asset value.
Note: 0.50% of the amount calculated by dividing the net asset value by
(1-0.035) and rounding to three decimal places will be retained by
Putnam Mutual Funds Corp.
7. MINIMUM AMOUNT OR The minimum amount for purchase of
NUMBER OF SHARES Shares is 100 Shares. Shares may be
FOR SUBSCRIPTION: purchased in integral multiples of 10
Shares.
8. PERIOD OF SUBSCRIPTION: From: January 4, 2000 (Tuesday)
To: December 29, 2000 (Friday),
provided that the subscription is handled
only on a day that is both a Fund Business
Day and a business day when securities
companies are open for business in Japan.
Note: A "Fund Business Day" means a day on which the New York Stock Exchange
is open for business.
9. DEPOSIT FOR SUBSCRIPTION: None.
10. PLACE OF SUBSCRIPTION: Yamatane Securities Co., Ltd. (hereinafter
referred to as " Yamatane" or the
"Distributor") 7-12, Nihonbashi-kabutocho,
Chuo-ku, Tokyo
Note: The subscription is handled at the head office and the branch offices
in Japan of the above-mentioned securities company.
11. DATE AND PLACE Investors shall pay the Issue Price and
OF PAYMENT: Sales Charge to Yamatane within 4 business
days in Japan from the day when Yamatane
confirms the execution of the order (the
"Trade Day"). The total issue price for
each Application Day will be transferred
by Yamatane to the account of the Fund at
Putnam Fiduciary Trust Company, the
transfer agent, within 4 Fund Business
Days (hereinafter referred to as "Payment
Date") from (and including) the
Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) Yamatane undertakes to make a public offering of Shares in accordance
with an agreement dated June 22, 1998 with Putnam Mutual Funds Corp. in
connection with the sale of the Shares in Japan.
(B) Yamatane will execute or forward purchase orders and repurchase
requests relating to the Shares received directly or indirectly through
other sales and repurchase handling companies (each hereinafter referred to
as a "Sales Handling Company") to the Fund.
Note: A "Sales Handling Company" means a securities agent company and/or
registration agent financial institution which shall conclude the
agreement with a Distributor concerning agency business of shares of
the Fund, act as agent for a Distributor for subscription or repurchase
of shares of the Fund from investors and handle the business, etc.
concerning receipt of subscription money from investors or payment of
repurchase proceeds to investors, etc.
(C) The Fund has appointed Yamatane as the Agent Company in Japan.
Note: The "Agent Company" shall mean the company which, under a contract made
with a foreign issuer of investment securities, makes public the net
asset value per Share and submits or forwards the financial reports or
other documents to the Japan Securities Dealers Association ("JSDA") or
other Sales Handling Companies rendering other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall enter into an agreement with a
Sales Handling Company concerning transactions of foreign securities. A Sales
Handling Company shall provide to the investors a Contract Concerning a Foreign
Securities Transactions Account and other prescribed contracts (the
"Contracts"), and the investors shall submit to the Sales Handling Company an
application requesting the opening of a transactions account under the
Contracts. The subscription amount shall be paid in yen in principle and the
yen exchange rate shall be the foreign exchange rate quoted in the Tokyo
Foreign Exchange Market on the Trade Day of each subscription, which shall be
determined by such Sales Handling Company.
Yamatane shall pay the subscription amount in dollars to the account of the
Fund with Putnam Fiduciary Trust Company as custodian for the Fund on the
Payment Date.
(B) PERFORMANCE INFORMATION
The following information provides some indication of the fund's risks.
The chart shows year-to-year changes in the performance of one of the fund's
classes of shares, class M shares. The table following the chart compares the
fund's performance to that of a broad measure of market performance. Of
course, the fund's past performance is not an indication of future performance.
[GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS FOR CLASS M
SHARES]
Calendar Year Total Returns for class M shares
1991 13.46
1992 -1.81
1993 30.32
1994 5.99
1995 21.16
1996 22.16
1997 21.32
1998 23.12
During the periods shown in the bar chart, the highest return for a
quarter was 19.92% (quarter ending 3/31/98) and the lowest return for a
quarter was -18.38% (quarter ending 9/30/98).
Average Annual Total Returns (for periods ending 12/31/98)
- -------------------------------------------------------------------------------
Past 1 year Past 5 years Since Inception *
- -------------------------------------------------------------------------------
Class M 18.82% 17.72% 15.55%
- -------------------------------------------------------------------------------
MSCI Europe Index 28.53% 19.11% 14.89%
- -------------------------------------------------------------------------------
* Inception date: 12/1/94
Unlike the bar chart, this performance information reflects the impact of
sales charges. Class M share performance reflects the current maximum initial
sales charge. Performance of Class M shares in the bar chart and table
following the chart, for periods prior to their inception on December 1, 1994,
is derived from the historical performance of the Fund's class A shares (not
offered in Japan), adjusted to reflect the appropriate sales charge and the
higher 12b-1 fees paid by class M shares. The Fund's performance is compared
to the Morgan Stanley Capital International Europe Index (MSCI), an unmanaged
index of equity securities originating in one of the fifteen European
countries.
(C) FEES AND EXPENSES
This table summarizes the fees and expenses investors may pay if they invest
in the fund. Expenses are based on the fund's last fiscal year.
Shareholder Fees (fees paid directly from investor's investment)
- -------------------------------------------------------------------------------
Class M Shares
- -------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) 3.50%
- -------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (as a percentage of the
original purchase price or redemption proceeds, whichever is
lower) NONE
- -------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
- -------------------------------------------------------------------------------
Total Annual
Fund
Management Distribution Operating
Fees (12b-1) Fees Other Expenses Expenses
- -------------------------------------------------------------------------------
Class M 0.70% 0.75% 0.28% 1.73%
- -------------------------------------------------------------------------------
(D) EXAMPLE
This example translates the "total annual fund operating expenses" shown in the
preceding table into dollar amounts. By doing this, investors can more easily
compare the cost of investing in the fund to the cost of investing in other
mutual funds. The example makes certain assumptions. It assumes that an
investor invests $10,000 in the fund for the time periods shown and then
redeems all shares at the end of those periods. It also assumes a 5% return
on an investor's investment each year and that the fund's operating expenses
remain the same. The example is hypothetical; actual costs and returns may be
higher or lower.
- -------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------
Class M $520 $876 $1,256 $2,319
- -------------------------------------------------------------------------------
(E) Offerings other than in Japan:
Shares are simultaneously offered in the United States of America.
PART II. INFORMATION CONCERNING ISSUER
I. DESCRIPTION OF THE FUND
The description in this item is same as the description in I. DESCRIPTION
OF THE FUND of the Annual Securities Report (The Fifth Fiscal Year)
attached hereafter.
II. OUTLINE OF THE FUND
The description in this item is same as the description in II. OUTLINE OF
THE FUND of the Annual Securities Report (The Fifth Fiscal Year) attached
hereafter.
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is same as the description in III. OUTLINE OF
THE OTHER RELATED COMPANIES of the Annual Securities Report (The Fifth
Fiscal Year) attached hereafter.
IV. FINANCIAL CONDITIONS OF THE FUND
The description in this item is same as the description in IV. FINANCIAL
CONDITIONS OF THE FUND of the Annual Securities Report (The Fifth Fiscal
Year) attached hereafter.
V. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES
The description in this item is same as the description in V. SUMMARY OF
INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES of the Annual
Securities Report (The Fifth Fiscal Year) attached hereafter.
VI. MISCELLANEOUS
(1) The following documents in relation to the Fund were filed with the
Director of Kanto Local Finance Bureau.
July 1, 1998: Amendment to Securities Registration Statement
December 18, 1998: Securities Registration Statement
December 22, 1998: Amendment to Securities Registration Statement
December 25, 1998: Amendment to Securities Registration Statement
March 31, 1999: Semi-annual Report (during the fifth term)
Amendment to Securities Registration Statement
June 18, 1999: Securities Registration Statement
June 21, 1999: Amendment to Securities Registration Statement
June 25, 1999: Amendment to Securities Registration Statement
(2) The ornamental design is used on cover page of the Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the beginning of the
Prospectus, summarizing the content of Part I., Information on the
securities, "I. Descriptions of the Fund", "III. Outline of Other Related
Companies" and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
Attached document (Summarized Preliminary Prospectus) will be used pursuant
to the below, as the document (Summarized Preliminary Prospectus) as set
forth at Item 1.(1)(b), of Article 12 of the Ordinance Concerning the
Disclosure of the Content, etc. of the Specified Securities.
(a) The content of the summarized Preliminary Prospectus may be publicized
by leaflets, pamphlets, direct mails (post cards and mail in envelopes) or
at newspapers, magazines, Internet and other books.
(b) The layout, quality of papers, printing color, design etc. of the
Summarized Preliminary Prospectus may vary depending on manner of usage.
Photos and illustrations set forth in the attached may be used.
(c) For information of the Fund's performance, the changes of the net asset
value per share and the rate fluctuation since the establishment of the
Fund or for the latest 3 months, 6 months, one year, two years, three years
or five years may be set out in the figures or graphs. Such information
regarding the Fund's achievement may be converted into and presented in
yen.
(d) For information of the type of the Fund, diversification of investment
portfolio in type of assets and/or the name of country may be set forth in
the figures or graphs. As to such information the latest information which
is available from time to time after the filing of the Securities
Registration Statement may be set forth.
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN MASSACHUSETTS
Below is an outline of certain general information about open-end U.S.
investment companies. This outline is not intended to provide
comprehensive information about such investment companies or the various
laws, rules or regulations applicable to them, but provides only a brief
summary of certain information that may be of interest to investors. The
discussion below is qualified in its entirety by the complete registration
statement of the fund and the full text of any referenced statutes and
regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as Massachusetts business trusts. A
Massachusetts business trust is organized pursuant to a declaration of trust,
setting out the general rights and obligations of the shareholders, trustees,
and other related parties. Generally, the trustees of the trust oversee its
business, and its officers and agents manage its day-to-day affairs.
Chapter 182 of the Massachusetts General Laws applies to certain "voluntary
associations", including many Massachusetts business trusts. Chapter 182
provides for, among other things, the filing of the declaration of trust with
the Secretary of State of the Commonwealth of Massachusetts and the filing by
the trust of an annual statement regarding, among other things, the number of
its shares outstanding and the names and addresses of its trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a trust. Typically, a
declaration of trust disclaims shareholder liability for acts or obligations
of the trust and provides for indemnification out of trust property for all
loss and expense of any shareholder held personally liable for the obligations
of a trust. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which a
particular trust would be unable to meet its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management arrangements which offer
shares to the public are governed by a variety of federal statutes and
regulations. Most mutual funds are subject to these laws. Among the more
significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in general,
requires investment companies to register as such with the U.S. Securities and
Exchange Commission (the "SEC"), and to comply with a number of substantive
regulations of their operations. The 1940 Act requires an investment company,
among other things, to provide periodic reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates many sales
of securities. The Act, among other things, imposes various registration
requirements upon sellers of securities and provides for various liabilities
for failures to comply with its provisions or in respect of other specified
matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"), regulates a
variety of matters involving, among other things, the secondary trading of
securities, periodic reporting by the issuers of securities, and certain of
the activities of transfer agents and brokers and dealers.
4. The Internal Revenue Code
An investment company is an entity subject to federal income taxation under
the Internal Revenue Code. However, under the Code, an investment company may
be relieved of federal taxes on income and gains it distributes to shareholders
if it qualifies as a "regulated investment company" under the Code for federal
income tax purposes and meets all other necessary requirements.
5. Other laws
The Fund is subject to the provisions of other laws, rules, and regulations
applicable to the Fund or its operations, such as, for example, various state
laws regarding the sale of the Fund's shares.
B. Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the Fund or certain
of its operations are the SEC and state regulatory agencies or authorities.
1. The SEC has broad authority to oversee the application and enforcement
of the federal securities laws, including the 1940 Act, the 1933 Act, and
the 1934 Act, among others, to the Fund. The 1940 Act provides the SEC
broad authority to inspect the records of investment companies, to exempt
investment companies or certain practices from the provisions of the Act,
and otherwise to enforce the provisions of the Act.
2. State authorities typically have broad authority to regulate the
activities of brokers, dealers, or other persons directly or indirectly
engaged in activities relating to the offering and sale of securities to
their residents or within their jurisdictions.
C. Offering Shares to the Public
An investment company ("investment company" or fund) offering its shares to
the public must meet a number of requirements, including, among other things,
registration as an investment company under the 1940 Act; registration of the
sale of its shares under the 1933 Act; registration of the fund, the sale of
its shares, or both, with state securities regulators; delivery of a current
prospectus to current or prospective investors; and so forth. Many of these
requirements must be met not only at the time of the original offering of the
fund's shares, but compliance must be maintained or updated from time to time
throughout the life of the fund.
D. Ongoing Requirements
Under U.S. law, a fund that continuously offers its shares is subject to
numerous ongoing requirements, including, but not limited to;
1. Updating its prospectus if it becomes materially inaccurate or misleading;
2. Annual update of its registration statement;
3. Filing semi-annual and annual financial reports with the SEC and
distributing them to shareholders;
4. Annual trustee approval of investment advisory arrangements, distribution
plans, underwriting arrangements, errors and omissions/director and officer
liability insurance, foreign custody arrangements, and auditors;
5. Maintenance of a code of ethics; and
6. Periodic board review of certain fund transactions, dividend payments, and
payments under a fund's distribution plan.
III. Management of a Fund
The board of directors or trustees of a fund are responsible for generally
overseeing the conduct of a fund's business. The officers and agents of a
fund are generally responsible for the day-to-day operations of a fund.
The trustees and officers of a fund may or may not receive a fee for their
services.
The investment adviser to a fund is typically responsible for implementing
the fund's investment program. The adviser typically receives a fee for
its services based on a percentage of the net assets of a fund. Certain
rules govern the activities of investment advisers and the fees they may
charge. In the United States, investment advisers to investment companies
must be registered under the Investment Advisers Act of 1940, as amended.
IV. Share Information
A. Valuation
Shares of a fund are generally sold at the net asset value next determined
after an order is received by a fund, plus any applicable sales charges. A
fund normally calculates its net asset value per share by dividing the total
value of its assets, less liabilities, by the number of its shares outstanding.
Shares are typically valued as of the close of regular trading on the New York
Stock Exchange (4:00 p.m., New York time) each day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of an open-end fund to that fund any day
the fund is open for business at the net asset value next computed after
receipt of the shareholders' order. Under unusual circumstances, a fund may
suspend redemptions, or postpone payment for more than seven days, if permitted
by U.S. securities laws. A fund may charge redemption fees as described in
its prospectus.
C. Transfer agency
The transfer agent for a fund typically processes the transfer of shares,
redemption of shares, and payment and/or reinvestment of distributions.
V. Shareholder Information, Rights and Procedures for the Exercise of Such
Rights
A. Voting Rights
Voting rights vary from fund to fund. In the case of many funds organized
as Massachusetts business trusts, shareholders are entitled to vote on the
election of trustees, approval of investment advisory agreements, underwriting
agreements, and distribution plans (or amendments thereto), certain mergers or
other business combinations, and certain amendments to the declaration of
trust. Shareholder approval is also required to modify or eliminate a
fundamental investment policy.
B. Dividends
Shareholders are typically entitled to receive dividends when and if declared
by a fund's trustees. In declaring dividends, the trustees will normally set
a record date, and all shareholders of record on that date will be entitled to
receive the dividend paid.
C. Dissolution
Shareholders would normally be entitled to receive the net assets of a fund
which were liquidated in accordance with the proportion of the fund's
outstanding shares he owns.
D. Transferability
Shares of a fund are typically transferable without restriction.
E. Right to Inspection
Shareholders of a Massachusetts business trust have the right to inspect the
records of the trust as provided in the declaration of trust or as otherwise
provided by applicable law.
VI. U.S. Tax Matters
The Fund intends to qualify each year as a regulated investment company
under Subchapter M of the United States Internal Revenue Code of 1986, as
amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to U.S. federal
income tax on any of its net investment income or net realized capital
gains that are distributed to its shareholders. In addition, as a
Massachusetts business trust, the Fund under present Massachusetts law is
not subject to any excise or income taxes in Massachusetts.
In order to qualify as a "regulated investment company" and to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, the Fund must, among other things, (a) derive at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale of stock, securities and foreign
currencies, or other income (including but not limited to gains from
options, futures, or forward contracts) derived with respect to its
business of investing in such stock, securities, or currencies; (b)
distribute with respect to each taxable year at least 90% of the sum of its
taxable net investment income, its net tax-exempt income, and the excess,
if any, of its net short-term capital gains over net long-term capital
losses for such year; (c) diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the value of its
total assets consists of cash, cash items, U.S. Government Securities,
securities of other regulated investment companies and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of the Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25 % of the value of its
assets is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one issuer or of
two or more issuers which the Fund controls and which are engaged in the
same, similar or related trades or businesses.
If the Fund failed to qualify as a regulated investment company accorded
special tax treatment in any taxable year, the Fund would be subject to tax
on its taxable income at corporate rates, and all distributions from
earnings and profits, including any distributions of net tax-exempt income
and net long-term capital gains, would be taxable to shareholders as
ordinary income. In addition, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest and make substantial
distributions before requalifying as a regulated investment company that is
accorded special tax treatment.
If the Fund fails to distribute in a calendar year substantially all of its
ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if the Fund is
permitted to elect and so elects), plus any retained amount from the prior
year, the Fund will be subject to a 4% excise tax on the undistributed
amounts. A dividend paid to shareholders by the Fund in January of a year
generally is deemed to have been paid by the Fund on December 31 of the
preceding year, if the dividend was declared and payable to shareholders of
record on a date in October, November or December of that preceding year.
The Fund intends generally to make distributions sufficient to avoid
imposition of the 4% excise tax.
Fund distributions generally will be taxable to shareholders as ordinary
income, except that any distributions designated by the Fund as deriving
from net gains on securities held by the Fund for more than one year will
be taxable as such, regardless of how long a shareholder has held shares in
the Fund. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of distributions.
Shareholders who are not subject to U.S. federal income tax on their income
generally will not have to pay such tax on amounts distributed to them.
Distributions from capital gains are made after applying any available
capital loss carryovers.
The Fund's transactions in non-U.S. currencies, non-U.S. currency-denominated
debt securities and certain non-U.S. currency options, futures contracts and
forward contracts (and similar instruments) may give rise to ordinary income
or loss to the extent such income or loss results from fluctuations in the
value of the non-U.S. currency concerned.
Investment by the Fund in "passive non-U.S. investment companies" could
subject the Fund to a U.S. federal income tax or other charge on the
proceeds from the sale of its investment in such a company; however, this
tax can be avoided by making an election to mark such investments to market
annually or to treat the passive non-U.S. investment company as a
"qualified electing fund".
A "passive non-U.S. investment company" is any non-U.S. corporation: (i) 75
percent or more of the income of which for the taxable year is passive
income, or (ii) the average percentage of the assets held by corporation
(generally determined by value, but by adjusted tax basis in certain cases)
that produce or are held for the production of passive income is at least
50 percent. Generally, passive income for this purpose means dividends,
interest (including income equivalent to interest), royalties, rents,
annuities, the excess of gains over losses from certain property
transactions and commodities transactions, and non-U.S. currency gains.
Passive income for this purpose does not include rents and royalties
received by the non-U.S. corporation from active business and certain
income received from related persons.
The Fund's investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a discount
may) require the Fund to accrue and distribute income not yet received. In
order to generate sufficient cash to make the requisite distributions, the
Fund may be required to sell securities in its portfolio that it otherwise
would have continued to hold.
The Fund generally is required to withhold and remit to the U.S. Treasury
31% of the taxable dividends and other distributions paid to any individual
shareholder who fails to furnish the Fund with a correct taxpayer
identification number (TIN), who has under-reported dividends or interest
income, or who fails to certify to the fund that he or she is not subject
to such withholding. Shareholders who fail to furnish their correct TIN
are subject to a penalty of $50 for each such failure unless the failure is
due to reasonable cause and not wilful neglect. An individual's taxpayer
identification number is his or her social security number.
New regulations relating to withholding tax on income paid to foreign
persons (the "New Withholding Regulations") will generally be effective for
payments made after December 31, 2000. The New Withholding Regulations
modify and, in general, unify the way in which non-U.S. investors establish
their status as non-U.S. States "beneficial owners" eligible for
withholding exemptions including a reduced treaty rate or an exemption from
backup withholding. For example, the new regulations will require new
forms, which non-U.S. investors will generally have to provide earlier than
they would have had to provide replacements for expiring existing forms.
The New Withholding Regulations clarify withholding agents' reliance
standards. They also require additional certifications for claiming treaty
benefits. For example, a non-U.S. investor may be required to provide a
TIN, and may have to certify that he/she "derives" the income with respect
to which the treaty benefit is claimed within the meaning of applicable
regulations. The New Withholding Regulations also provide somewhat
different procedures for foreign intermediaries and flow-through entities,
such as foreign partnerships, to claim the benefit of applicable exemptions
on behalf of non-U.S. investors for which or for whom they receive
payments. The New Withholding Regulations also amend the foreign broker
office deinition as it applies to partnerships.
The New Withholding Regulations are complex and this summary does not
completely describe them. Non-U.S. investors should consult with their tax
advisors to determine how the New Withholding Regulationswill affect their
particular circumstances.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility
that distributions may be subject to a 30% United States withholding tax
(or a reduced rate of withholding provided by treaty), the possibility that
a non-U.S. investor may be subject to U.S. tax on capital gain
distributions and gains realized upon the sale of fund shares if the
investor is present in the United States for at least 31 days during the
calendar year (and certain other conditions apply), or the possibility that
a non-U.S. investor may be subject to U.S. tax on income from the fund that
is "effectively connected" with a U.S. trade or business carried on by such
an investor. Shareholders residing in Japan should consult "Tax Treatment
of Shareholders in Japan", above.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For
the complete provisions, reference should be made to the pertinent Code
sections and regulations. The Code and regulations are subject to change
by legislative or administrative actions. Dividends and distributions also
may be subject to state, local or foreign taxes. Shareholders are urged to
consult their tax advisers regarding specific questions as to U.S. federal,
state or local taxes. The foregoing discussion relates solely to U.S.
federal income tax law.
VII. Important Participants in Offering of Mutual Fund Shares
A. Investment Company
Certain pooled investment vehicles qualify as investment companies under the
1940 Act. There are open-end investment companies (those which offer
redeemable securities) and closed-end investment companies (any others).
B. Investment Adviser/Administrator
The investment adviser is typically responsible for the implementation of an
investment company's investment program. It, or another affiliated or
unaffiliated entity, may also perform certain record keeping and
administrative functions.
C. Underwriter
An investment company may appoint one or more principal underwriters for
its shares. The activities of such a principal underwriter are generally
governed by a number of legal regimes, including, for example, the 1940 Act,
the 1933 Act, the 1934 Act, and state laws.
D. Transfer Agent
A transfer agent performs certain bookkeeping, data processing, and
administrative services pertaining to the maintenance of shareholder accounts.
A transfer agent may also handle the payment of any dividends declared by the
trustees of a fund.
E. Custodian
A custodian's responsibilities may include, among other things, safeguarding
and controlling a fund's cash and securities, handling the receipt and delivery
of securities, and collecting interest and dividends on a fund's investments.
II. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT COMPANY
Japanese translation of the statements for the fiscal years ended December
31, 1998 and 1997.
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of the Fund (if issued)
are as follows:-
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust applies to
shareholders and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
[Translation]
ANNUAL SECURITIES REPORT
(The Fifth Fiscal Year)
From: July 1, 1998
To: June 30, 1999
PUTNAM EUROPE GROWTH FUND
ANNUAL SECURITIES REPORT
(The Fifth Fiscal Year)
From: July 1, 1998
To: June 30, 1999
To: Director of Kanto Local Finance Bureau
Filing Date: December 17, 1999
Name of the Registrant Trust: PUTNAM EUROPE GROWTH FUND
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano
------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
---------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
- -ii-
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Places where a copy of this Annual Securities Report
is available for Public Inspection
Not applicable.
(Total number of pages of this Annual Securities Report is 77.)
C O N T E N T S
Japanese This
Original English
Translation
I. DESCRIPTION OF THE FUND 1 1
1. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 6 7
3. MANAGEMENT STRUCTURE 10 12
4. INFORMATION CONCERNING THE EXERCISE OF
RIGHTS BY SHAREHOLDERS, ETC. 20 25
5. STATUS OF INVESTMENT PORTFOLIO 22 29
II. OUTLINE OF THE FUND 25 32
III. OUTLINE OF THE OTHER RELATED COMPANIES 64 65
IV. FINANCIAL CONDITION OF THE FUND 66 70
V. FINANCIAL CONDITION OF THE INVESTMENT
MANAGEMENT COMPANY 128 73
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 149 73
VII. REFERENCE INFORMATION 149 73
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.$l.00=
[YEN] 105.00, the mean of the exchange rate quotations by The Bank of
Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by telegraphic
transfer against yen on October 29, 1999.
Note 2: In this report, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount for the "total" column is not
equal to the aggregate amount. Also, conversion into other currencies is
done simply by multiplying the corresponding amount by the conversion rate
specified and rounded up when necessary. As a result, in this report, there
are cases in which figures for the same information differ from each other.
Note 3: In this report, "fiscal year" refers to a year from July 1 to June 30
of the following year. However, the first fiscal year refers to a period from
December 1, 1994 (Incorporation of the Fund) to June 30, 1995.
I. DESCRIPTION OF THE FUND
1. GENERAL INFORMATION
(A) Outline of Laws Regulating the Fund in the Jurisdiction Where
Established:
(1) Name of the Fund: Putnam Europe Growth Fund (the "Fund")
(2) Form of the Fund
Putnam Europe Growth Fund is a Massachusetts business trust organized on
November 10, 1988. A copy of the Agreement and Declaration of Trust, which is
governed by Massachusetts law, is on file with the Secretary of State of The
Commonwealth of Massachusetts.
The Fund is an open-end, diversified management investment company with an
unlimited number of authorized shares of beneficial interest. The Trustees
may, without shareholder approval, create two or more series of shares
representing separate investment portfolios. Any such series of shares may be
divided, without shareholder approval, into two or more classes of shares
having such preferences and special or relative rights and privileges as the
Trustees determine. The Fund's shares are not currently divided into series.
Only the Fund's Class M Shares are currently offered in Japan. The Fund also
offers in the United States of America other classes of shares with different
sales charges and expenses. Because of these different sales charges and
expenses, the investment performance of the classes will vary.
Each share has one vote, with fractional shares voting proportionally.
Shares of all classes will vote together as a single class except when
otherwise required by law or as determined by the Trustees. Shares are freely
transferable, are entitled to dividends as declared by the Trustees, and, if
the Fund were liquidated, would receive the net assets of the Fund. The Fund
may suspend the sale of shares at any time and may refuse any order to purchase
shares. Although the Fund is not required to hold annual meetings of its
shareholders, shareholders holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to elect or remove Trustees,
or to take other actions as provided in the Agreement and Declaration of Trust.
If a shareholder owns fewer shares than the minimum set by the Trustees
(presently 20 shares), the Fund may choose to redeem the shareholders' shares.
Shareholders will receive at least 30 days' written notice before the Fund
redeems their shares, and shareholders may purchase additional shares at any
time to avoid a redemption. The Fund may also redeem shares if shareholders
own shares above a maximum amount set by the Trustees. There is presently no
maximum, but the Trustees may, at any time, establish one, which could apply to
both present and future shareholders.
(3) Governing Laws
The Fund was created under, and is subject to, the laws of The Commonwealth
of Massachusetts. The sale of the Fund's shares is subject to, among other
things, the Securities Act of 1933, as amended, and certain state securities
laws. The Fund also attempts to qualify each year and elect to be taxed as a
regulated investment company under the United States Internal Revenue Code of
1986, as amended.
The following is a broad outline of certain of the principal statutes
regulating the operations of the Fund in the U.S.:
a. Massachusetts General Laws, Chapter 182 - Voluntary Associations and
Certain Trusts
Chapter 182 provides in part as follows:
A copy of the declaration of trust must be filed with the Secretary of
State of The Commonwealth of Massachusetts and with the Clerk of the City of
Boston. Any amendment of the declaration of trust must be filed with the
Secretary and the Clerk within thirty days after the adoption of such
amendment.
A trust must annually file with the Secretary of State on or before
June 1 a report providing the name of the trust, its address, number of shares
outstanding and the names and addresses of its trustees.
Penalties may be assessed against the trust for failure to comply with
certain of the provisions of Chapter 182.
b. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in
general, requires investment companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and to comply with a number
of substantive regulations of their operations. The 1940 Act requires an
investment company, among other things, to provide periodic reports to its
shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates many
sales of securities. The 1933 Act, among other things, imposes various
registration requirements upon sellers of securities and provides for various
liabilities for failures to comply with its provisions or in respect of other
specified matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"),
regulates a variety of matters involving, among other things, the secondary
trading of securities, periodic reporting by the issuers of securities, and
certain of the activities of transfer agents and brokers and dealers.
e. The Internal Revenue Code
The Fund intends to qualify as a "regulated investment company" for
federal income tax purposes and to meet all other requirements necessary for it
to be relieved of federal taxes on income and gains it distributes to
shareholders.
f. Other laws
The Fund is subject to the provisions of other laws, rules, and
regulations applicable to the Fund or its operations, such as, for example,
various state laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the Fund or
certain of its operations are the SEC and state regulatory agencies or
authorities.
a. The SEC has broad authority to oversee the application and
enforcement of the federal securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund. The 1940 Act provides the
SEC broad authority to inspect the records of investment companies, to exempt
investment companies or certain practices from the provisions of the Act, and
otherwise to enforce the provisions of the Act.
b. State authorities typically have broad authority to regulate the
activities of broker, dealers, or other persons directly or indirectly engaged
in activities relating to the offering and sale of securities to their
residents or within their jurisdictions.
(C) Objectives and Basic Nature of the Fund:
GOAL
The Fund seeks capital appreciation.
MAIN INVESTMENT STRATEGIES -- EUROPEAN GROWTH AND VALUE STOCKS
We mainly invest in common stocks issued by European companies. We first
select the countries and industries we believe are attractive. We then seek
stocks offering opportunity for gain. These may include both growth and value
stocks. Growth stocks are issued by companies whose earnings we believe are
likely to grow faster than the European economy as a whole. Growth in earnings
may lead to an increase in the price of the stock. Value stocks are those that
we believe are currently undervalued by the market. If we are correct and
other investors recognize the value of the company, the price of these stocks
may rise. We invest mainly in midsized and large companies, although we can
invest in companies of any size. Although we emphasize investments in
developed countries, we may also invest in companies located in developing
(also known as emerging) markets, such as those in Eastern Europe.
MAIN RISKS
The main risks that could adversely affect the value of this fund's shares and
the total return on your investment include:
* The risks of investing outside the United States, such as currency
fluctuations, economic or financial instability, lack of timely or reliable
financial information or unfavorable political or legal developments. These
risks are increased for investments in emerging markets.
* The risks of investing mostly in one geographic region. Investments in a
single region, even though representing a number of different countries
within the region, may be affected by common economic forces and other
factors. This vulnerability to factors affecting European investments is
significantly greater than for a more geographically diversified fund, and
may result in greater losses and volatility.
* The risk that the stock price of one or more of the companies in the fund's
portfolio will fall, or will fail to rise. Many factors can adversely affect
a stock's performance, including both general financial market conditions and
factors related to a specific company or industry. This risk is generally
greater for small and midsized companies, which tend to be more vulnerable to
adverse developments.
* The risk that movements in financial markets will adversely affect the price
of the fund's investments, regardless of how well the companies in which we
invest perform.
Investors can lose money by investing in the fund. The fund may not achieve
its goal, and is not intended as a complete investment program. An investment
in the fund is not a deposit of a bank and is not insured or guaranteed by the
U.S. Federal Deposit Insurance Corporation or any other government agency.
(D) History of the Fund:
November 10, 1988: Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
July 13, 1990: Adoption of the Amended and Restated
Agreement and Declaration of Trust
(E) Affiliated Companies of the Fund:
Names and related business of the affiliated companies of the Fund are as
follows:
(1) Putnam Investment Management, Inc. (the "Investment Management
Company") renders investment management services to the Fund.
(2) Putnam Fiduciary Trust Company (the "Custodian" and the "Investor
Servicing Agent") acts as Custodian and Investor Servicing Agent.
(3) Putnam Mutual Funds Corp. (the "Principal Underwriter") engages in
providing marketing services to the Fund.
(4) Yamatane Securities Co., Ltd. ("Distributor in Japan" and "Agent
Company") engages in forwarding the purchase or repurchase orders for the
Shares in Japan and also acts as the agent company.
Related Companies of the Fund
Fund
Putnam Europe Growth Fund
Trustees
(Agreement and Investor
Declaration of Trust) Servicing
Agreement
Distribution Agreement Custodian Agreement
Principal Custodian Investor
Underwriter Servicing Agent
Putnam Mutual Putnam Fiduciary
Funds Corp. Trust Company
(acts as distributor) (acts as custodian and
investor servicing
agent of the Fund)
Japan Dealer
Sales Agreement
Agent Company Mangement Contract
Agreement
Distributor in Japan Investment
Agent Company Management Company
Yamatane Securities Co., Ltd. Putnam Investment Management, Inc.
(forwarding of sales in Japan (acts as investment manager of the
and rendering of service as Fund and investment advisor
agent company) concerning the Fund's assets
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objects of Investment (including risk
factors):
Any investment carries with it some level of risk that generally reflects its
potential for reward. We pursue the fund's goal by investing mainly in growth
and value stocks issued by European companies. We will consider, among other
things, a company's financial strength, competitive position in its industry
and projected future earnings and dividends when deciding which investments to
buy or sell. A description of the risks associated with the Fund's main
investment strategies follows.
Common stocks
Common stock represents an ownership interest in a company. The value of a
company's stock may fall as a result of factors relating directly to that
company, such as decisions made by its management or lower demand for the
company's products or services. A stock's value may also fall because of
factors affecting not just the company, but companies in the same or in a
number of different industries, such as increases in production costs. The
value of a company's stock may also be affected by changes in financial markets
relatively unrelated to the company or its industry, such as changes in
interest rates or currency exchange rates. In addition, a company's stock
generally pays dividends only after the company makes required payments to
holders of its bonds and other debt. For this reason, the value of the stock
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. Stocks
of smaller companies may be more vulnerable to adverse developments than
those of larger companies.
Growth stocks
We invest in stocks of companies whose earnings we believe are likely to grow
faster than the economy as a whole. These growth stocks typically trade at
higher multiples of current earnings than other stocks. Therefore, the values
of growth stocks may be more sensitive to changes in current or expected
earnings than the values of other stocks. If our assessment of the prospects
for the company's earnings growth is wrong, or if our judgment of how other
investors will value the company's earnings growth is wrong then the price of
the company's stock may fall or not approach the value that we have placed on
it.
Value stocks
We also invest in companies whose stock we believe is undervalued in the
market, often because the market has reacted to adverse developments, or has
failed to appreciate positive changes. These companies may have experienced
adverse business developments or may be subject to special risks that have
caused their stocks to be out of favor. If our assessment of a company's
prospects is wrong or if other investors do not similarly recognize the value
of the company, then the price of the company's stock may fall or may not
approach the value that we have placed on it.
Non-U.S. investments
We may invest without limit in securities of non-U.S. issuers. Non-U.S.
investments involve certain special risks, including;
* Unfavorable changes in currency exchange rates: Non-U.S. investments are
typically issued and traded in non-U.S. currencies. As a result, their
values may be affected by changes in the exchange rates between particular
non-U.S. currencies and the U.S. dollar.
* Political and economic developments: Non-U.S. investments may be subject to
the risks of seizure by a non-U.S. government, imposition of restrictions on
the exchange or transport of non-U.S. currency, and tax increases.
* Unreliable or untimely information: There may be less information publicly
available about a non-U.S. company than about most U.S. companies, and
non-U.S. companies are usually not subject to accounting, auditing and
financial reporting standards and practices comparable to those in the United
States.
* Limited legal recourse: Legal remedies for investors such as the Fund may be
more limited than those available in the United States.
* Limited markets: Certain non-U.S. investments may be less liquid (harder to
buy and sell) and more volatile than domestic investments, which means the
Fund may at times be unable to sell these non-U.S. investments at desirable
prices. For the same reason, we may at times find it difficult to value the
fund's non-U.S. investments.
* Trading practices: Brokerage commissions and other fees are generally higher
for non-U.S. investments than for U.S. investments. The procedures and rules
for settling non-U.S. transactions and custody may also involve delays in
payment, delivery or recovery of money or investments.
* Lower yield: Common stocks of non-U.S. companies have historically offered
lower dividends than stocks of comparable U.S. companies. Non-U.S.
withholding taxes may further reduce the amount of income available to
distribute to shareholders of the fund. The fund's yield is therefore
expected to be lower than yields of most funds that invest mainly in U.S.
companies.
The risks of non-U.S. investments are typically increased in less developed
countries, which are sometimes referred to as emerging markets. For example,
political and economic structures in these countries may be changing rapidly,
which can cause instability. These countries are also more likely to
experience high levels of inflation, deflation or currency devaluation, which
could hurt their economies and securities markets. For these and other
reasons, investments in emerging markets are often considered speculative.
Certain of these risks may also apply to some extent to U.S.-traded investments
that are denominated in non-U.S. currencies, investments in U.S. companies that
are traded in non-U.S. markets, or to investments in U.S. companies that have
significant non-U.S. operations. Special U.S. tax considerations may apply to
our non-U.S. investments.
Geographic focus
Developments in European economies will generally have a greater effect on the
Fund than they would on a more geographically diversified fund, which may
result in greater losses and volatility. This risk may be heightened by
efforts of the member countries of the European Union to continue to unify
their economic and monetary policies, which may increase the potential for
similarities in the movements of European markets and reduce the benefit of
diversification within the region.
Derivatives
We may engage in a variety of transactions involving derivatives, such as
futures, options, warrants and swap contracts. Derivatives are financial
instruments whose value depend upon, or is derived from, the value of something
else, such as one or more underlying investments, pools of investments, indexes
or currencies. We may use derivatives both for hedging and non-hedging
purposes. However, we may also choose not to use derivatives, based on our
evaluation of market conditions or the unavailability of suitable derivatives.
Derivatives involve special risks and may result in losses. The fund depends
on our ability to handle these sophisticated instruments. The prices of
derivatives may move in unexpected ways, especially in abnormal market
conditions. Some derivatives are "leveraged" and therefore may magnify or
otherwise increase investment losses. Our use of derivatives may also increase
the amount of taxes payable by shareholders.
Other risks arise from the potential inability to terminate or sell
derivatives positions. A liquid secondary market may not always exist for the
Fund's derivatives positions at any time. In fact, many over-the-counter
instruments (investments not traded on an exchange) will not be liquid.
Over-the-counter instruments also involve the risk that the other party to the
derivative transaction will not meet its obligations.
Other investments
In addition to the main investment strategies described above, we may also make
other types of investments, such as investments in preferred stocks,
convertible securities and debt securities which may be subject to other risks.
Alternative strategies
At times we may judge that market conditions make pursuing the fund's usual
investment strategies inconsistent with the best interests of the fund's
shareholders. We then may temporarily use alternative strategies that are
mainly designed to limit losses, including investing solely in the United
States. However, we may choose not to for a variety of reasons, even in very
volatile market conditions. These strategies may cause the fund to miss out on
investment opportunities, and may prevent us from achieving the fund's goal.
Changes in policies
The Fund's Trustees may change the Fund's goal, investment strategies and other
policies without shareholder approval, except as otherwise indicated.
(B) Restrictions on Investment:
Except as otherwise specifically designated, the investment restrictions
described in this document are not fundamental investment restrictions. The
Trustees may change any non-fundamental restrictions without shareholder
approval. As fundamental investment restrictions, which may not be changed
without a vote of a majority of the outstanding voting securities, the Fund
may not and will not:
(1) Borrow money in excess of 10% of the value (taken at the lower of cost
or current value) of its total assets (not including the amount borrowed)
at the time the borrowing is made, and then only from banks as a temporary
measure to facilitate the meeting of redemption requests (not for leverage)
which might otherwise require the untimely disposition of portfolio
investments or for extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are purchased.
(2) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it
may be deemed to be an underwriter under certain U.S. federal securities
laws.
(3) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, securities which are secured by
interests in real estate, and securities representing interests in real
estate, and it may acquire and dispose of real estate or interests in real
estate acquired through the exercise of its rights as a holder of debt
obligations secured by real estate or interests therein.
(4) Purchase or sell commodities or commodity contracts, except that the
Fund may purchase and sell financial futures contracts and options and may
enter into foreign (non-U.S.) exchange contracts and other financial
transactions not involving physical commodities.
(5) Make loans, except by purchase of debt obligations in which the fund
may invest consistent with its investment policies, by entering into
repurchase agreements, or by lending its portfolio securities.
(6) With respect to 75% of its total assets, invest in the securities of
any issuer if, immediately after such investment, more than 5% of the total
assets of the Fund (taken at current value) would be invested in the
securities of such issuer; provided that this limitation does not apply to
obligations issued or guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities.
(7) With respect to 75% of its total assets, acquire more than 10% of the
outstanding voting securities of any issuer.
(8) Purchase securities (other than securities of the U.S. government) if
as a result of such purchase more than 25% of the Fund's total assets would
be invested in any one industry.
(9) Issue any class of securities which is senior to the Fund's shares of
beneficial interest, except for permitted borrowings.
Although certain of the Fund's fundamental investment restrictions permit it
to borrow money to a limited extent, it does not currently intend to do so
and did not do so last year.
The Investment Company Act of 1940 provides that a "vote of a majority of the
outstanding voting securities" of the Fund means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Fund, or (2) 67%
or more of the shares present at a meeting if more than 50% of the outstanding
fund shares are represented at the meeting in person or by proxy.
It is contrary to the Fund's present policy, which may be changed without
shareholder approval, to:
Invest in (a) securities which are not readily marketable, (b) securities
restricted as to resale (excluding securities determined by the Trustees of the
Fund (or the person designated by the Trustees of the Fund to make such
determinations) to be readily marketable), and (c) repurchase agreements
maturing in more than seven days, if, as a result, more than 15% of the Fund's
net assets (taken at current value) would then be invested in the aggregate in
securities described in (a), (b) and (c) above.
In addition, the Fund will, so long as shares of the Fund are being offered for
sale by the Fund in Japan and such standards are required as a condition of
such offer for sale, comply with the following standards of selection of the
Japan Securities Dealers Association.
1. The Fund will not invest more than 15% of its net assets in securities
that are not traded on an official exchange or other regulated market
including without limitation, the National Association of Securities
Dealers Automated Quotation System (this restriction shall not be
applicable to bonds determined by Putnam Investment Management, Inc. to be
liquid and for which a market price (including a dealer quotation) is
generally obtainable or determinable);
2. The Fund will not borrow money in excess of 10% of the value of its
total assets;
3. The Fund will not make short sales of securities in excess of the Fund's
net asset value; and
4. The Fund will not together with other mutual funds managed by Putnam
Investment, Inc., acquire more than 50% of the outstanding voting
securities of any issuer.
If any violation of the foregoing standards occurs, the Fund will, promptly
after discovery of the violation, take such action as may be necessary to cause
the violation to cease, which shall be the only obligation of the Fund and the
only remedy in respect of the violation.
All percentage limitations on investments (other than pursuant to
non-fundamental restriction (1)) will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
Geographic focus
We normally invest at least 65% of the fund's total assets in European
companies. We consider the following to be European companies:
* companies organized under the laws of a European country,
* companies whose principal office is located in a European country,
* companies whose common stock is traded principally on a securities exchange
in Europe,
* companies that earn 50% or more of their total revenues from business in
Europe, or
* companies with 50% or more of their assets located in a European country.
(C) Distribution Policy:
The Fund distributes any net investment income and any net realized capital
gains at least annually. Distributions from net investment income, if any,
are expected to be small. Distributions from capital gains are made after
applying any available capital loss carryovers. The payment to Japanese
investors may be made, in principle, in accordance with the record date in
December each year by Yamatane.
3. MANAGEMENT STRUCTURE
(A) Outline of Management of Assets, etc.:
A. Valuation of assets:
The Fund determines the net asset value per share of each class of shares once
each day the New York Stock Exchange (the "Exchange") is open. Currently, the
Exchange is closed Saturdays, Sundays and the following U.S. holidays:
New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, the Fourth of July, Labor Day, Thanksgiving and
Christmas. The Fund determines the net asset value of each class as of the
close of regular trading on the Exchange, currently 4:00 p.m., New York time.
However, equity options held by the Fund are priced as of the close of trading
at 4:10 p.m., New York time, and futures contracts on U.S. government and other
fixed-income securities and index options held by the Fund are priced as of
their close of trading at 4:15 p.m., New York time.
Securities for which market quotations are readily available are valued at
prices which, in the opinion of Investment Management Company, most nearly
represent the market values of such securities. Currently, such prices are
determined using the last reported sale price or, if no sales are reported (as
in the case of some securities traded over-the-counter), the last reported bid
price, except that certain securities are valued at the mean between the last
reported bid and asked prices. Short-term investments having remaining
maturities of 60 days or less are valued at amortized cost, which approximates
market value. All other securities and assets are valued at their fair value
following procedures approved by the Trustees. Liabilities are deducted from
the total value of the assets attributable to a class, and the resulting amount
is divided by the number of shares of the class outstanding.
Reliable market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities, and certain foreign securities. These investments are valued at
fair value on the basis of valuations furnished by pricing services, which
determine valuations for normal, institutional-size trading units of such
securities using methods based on market transactions for comparable securities
and various relationships between securities which are generally recognized by
institutional traders.
If any securities held by the Fund are restricted as to resale, Investment
Management Company determines their fair value using procedures approved by the
Trustees. The fair value of such securities is generally determined as the
amount which the Fund could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of
the issuer and other fundamental analytical data relating to the investment and
to the nature of the restrictions on disposition of the securities (including
any registration expenses that might be borne by the Fund in connection with
such disposition). In addition, specific factors are also generally
considered, such as the cost of the investment, the market value of any
unrestricted securities of the same class, the size of the holding, the prices
of any recent transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.
Generally, trading in certain securities (such as non-U.S. securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset
value of the Fund's shares are computed as of such times. Also, because of the
amount of time required to collect and process trading information as to large
numbers of securities issues, the values of certain securities (such as
convertible bonds, U.S. government securities, and tax-exempt securities) are
determined based on market quotations collected earlier in the day at the
latest practicable time prior to the close of the Exchange. Occasionally,
events affecting the value of such securities may occur between such times and
the close of the Exchange which will not be reflected in the computation of the
Fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities will be valued at
their fair value using procedures approved by the Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Securities Company Fees
Under a Management Contract dated October 21, 1996, the Fund pays a quarterly
fee to Investment Management Company based on the average net assets of the
Fund, as determined at the close of each business day during the quarter, at
an annual rate of 0.80% of the first $500 million of average net assets, 0.70%
of the next $500 million, 0.65% of the next $500 million, 0.60% of the next
$5 billion, 0.575% of the next $5 billion, 0.555% of the next $5 billion,
0.540% of the next $5 billion, and 0.530% thereafter.
For the fiscal year ending on June 30, 1999, 1998 and 1997, the Fund paid
$12,211,545, $6,715,370 and $2,875,190, respectively, as a management fee.
(b) Custodian Fee and Charges of the Investor Servicing Agent
Putnam Fiduciary Trust Company, the Fund's Custodian, shall be entitled to
receive, out of the assets of the Fund, reasonable compensation for its
services and expenses as Custodian, as agreed from time to time between the
Fund and the Custodian, not including fees paid by the Custodian to any
sub-custodian, payable monthly based on the average daily total net assets
of the Fund during the relevant month. Any reasonable disbursements and
out-of-pocket expenses (including without limitation telephone, telex,
cable and postage expenses) incurred by the Custodian, and any custody
charges of banks and financial institutions to whom the custody of assets
of the Fund is entrusted, will be borne by the Fund.
The Fund will pay to Putnam Investor Services, a division of Putnam Fiduciary
Trust Company, the Fund's Investor Servicing Agent, such fee, out of the assets
of the Fund, as is mutually agreed upon in writing from time to time, in the
amount, at the time and in the manner of payment mutually agreed.
For the fiscal year ending on June 30, 1999, the Fund paid $3,852,012 as a
custodian fee and investor servicing agent fee.
(c) Fees under Class M Distribution Plan
The Class M distribution plan provides for payments by the Fund to Putnam
Mutual Funds Corp. at the annual rate of 1.00% of average net assets
attributable to Class M shares. The Trustees currently limit payments under
the Class M plan to the annual rate of 0.75% of such assets.
Payments under the plan are intended to compensate Putnam Mutual Funds Corp.
for services provided and expenses incurred by it as principal underwriter of
the Fund's shares, including payments to dealers mentioned below. Payments
to dealers are subject to the continuation of the Class M distribution plan
and the terms of an agreement between Yamatane and Putnam Mutual Funds Corp.
The payments to dealers are based on the average net asset value of Class M
shares attributable to shareholders for whom Yamatane and other dealers are
designated as the dealer of record. Putnam Mutual Funds Corp. makes quarterly
payments to dealers (including Yamatane) at the annual rate of 0.25% of the
average net asset value of Class M shares.
Putnam Mutual Funds Corp. also pays to Yamatane and other dealers, as
additional compensation with respect to the sale of Class M shares, 0.40% of
such average net asset value of Class M shares, respectively. For Class M
shares, the total annual payment to Yamatane and other dealers equals 0.65%
of such average net asset value.
For the fiscal year ending on June 30, 1999, the Fund paid fees under the
distribution plan of $1,024,513 for Class M shares.
(d) Other Expenses:
The Fund pays all expenses not assumed by Investment Management Company,
including Trustees' fees, auditing, legal, custodial, investor servicing and
shareholder reporting expenses, and payments under its distribution plans
(which are in turn allocated to the relevant class of shares). The Fund also
reimburses Investment Management Company for the compensation and related
expenses of certain Fund officers and their staff who provide administrative
services. The total reimbursement is determined annually by the Trustees
and was $20,474 for fiscal 1999.
Each Trustee receives a fee for his or her services. Each Trustee also
receives fees for serving as Trustee of other Putnam funds. The Trustees
periodically review their fees to assure that such fees continue to be
appropriate in light of their responsibilities as well as in relation to fees
paid to trustees of other mutual fund complexes. The Trustees meet monthly
over a two-day period, except in August. The Board Policy Committee, which
consists solely of Trustees not affiliated with the Investment Management
Company and is responsible for recommending Trustee compensation, estimates
that Committee and Trustee meeting time, together with the appropriate
preparation, requires the equivalent of at least three business days per
Trustee meeting. The following table shows the year each Trustee was first
elected a Trustee of the Putnam funds, the fees paid to each Trustee by the
Fund for fiscal 1999 and the fees paid to each Trustee by all of the Putnam
funds during calendar 1998:
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees/Year fund (1) fund expenses upon retirement (2) funds (3)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter/
1994 (4) $2,003 $408 $95,000 $207,000
Hans H. Estin/
1972 1,991 882 95,000 182,500
John A. Hill/
1985 (4) (5) 2,163 396 115,000 200,500
Ronald J. Jackson/
1996 (4) 2,031 352 95,000 200,500
Paul L. Joskow/
1997 (4) 1,991 96 95,000 180,500
Elizabeth T. Kennan/
1992 1,991 520 95,000 200,500
Lawrence J. Lasser/
1992 1,991 394 95,000 178,500
John H. Mullin, III/
1997 (4) 2,059 144 95,000 180,500
Robert E. Patterson/
1984 1,980 282 95,000 181,500
William F. Pounds/
1971 (5) 2,239 986 115,000 215,000
George Putnam/
1957 1,991 943 95,000 179,500
George Putnam, III/
1984 1,991 190 95,000 181,500
A.J.C. Smith/1986 1,970 615 95,000 176,500
W. Thomas Stephens/
1997 (4) 1,957 135 95,000 181,500
W. Nicholas Thorndike/
1992 1,991 735 95,000 182,500
(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral
Plan. The total amounts of deferred compensation payable by the fund to Ms.
Baxter and Messrs. Hill, Jackson, Joskow, Mullin and Stephens as of
June 30, 1999 were $3,038, $3,060, $2,960, $2,828, $2,832 and $3,077,
respectively, including income earned on such amounts.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</TABLE>
Under a Retirement Plan for Trustees of the Putnam funds (the "Plan") each
Trustee who retires with at least five years of service as a Trustee of the
funds is entitled to receive an annual retirement benefit equal to one-half of
the average annual compensation paid to such Trustee for the last three years
of service prior to retirement. This retirement benefit is payable during a
Trustee's lifetime, beginning the year following retirement, for a number of
years equal to such Trustee's years of service. A death benefit is also
available under the Plan which assures that the Trustee and his or her
beneficiaries will receive benefit payments for the lesser of an aggregate
period of (i) ten years or (ii) such Trustee's total years of service.
The Plan Administrator (a committee comprised of Trustees who are not
"interested persons" of the Fund, as defined in the Investment Company Act of
1940) may terminate or amend the Plan at any time, but no termination or
amendment will result in a reduction in the amount of benefits (i) currently
being paid to a Trustee at the time of such termination or amendment, or (ii)
to which a current Trustee would have been entitled had he or she retired
immediately prior to such termination or amendment.
Investment Management Company places all orders for purchases and sales of
Fund securities. In selecting broker-dealers, Investment Management Company
may consider research and brokerage services furnished to it and its
affiliates. Subject to seeking the most favorable price and execution
available, Investment Management Company may consider sales of Fund shares
(and, if permitted by law, of the other Putnam Funds) as a factor in the
selection of broker-dealers. During fiscal 1997, 1998 and 1999, the Fund paid
$1,427,191, $2,893,467 and $5,891,766 in brokerage commissions, respectively.
During fiscal 1999 the Fund paid $5,525,216 to brokers and dealers to recognize
research, statistical and quotation services provided to Investment Management
Company and its affiliates.
For the fiscal year ending June 30, 1999, the Fund paid $11,576,403 in total
other expenses (including payments under its distribution plan but excluding
Management Fees, investor servicing agent expenses and custodian expenses.)
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors residing in the U.S. can open a fund account with as little as $500
and make additional investments at any time with as little as $50 ($25 through
systematic investing). The Fund sells its shares at the offering price, which
is the NAV plus any applicable sales charge. Investors' financial advisor or
Putnam Investor Services generally must receive their completed buy order
before the close of regular trading on the New York Stock Exchange for
investors' shares to be bought at that day's offering price.
Investors residing in the U.S. can buy shares
* Through a financial advisor
Your advisor will be responsible for furnishing all necessary documents to
Putnam Investor Services, and may charge you for his or her services.
* Through systematic investing
Investors can make regular investments of $25 or more per month through
automatic deductions from investors' bank checking or savings account.
Application forms are available through investor's advisor or Putnam Investor
Services at 1-800-225-1581.
Investors may also complete an order form and write a check for the amount
they wish to invest payable to the Fund. Return the check and completed form
to Putnam Mutual Funds.
The Fund may periodically close to new purchases of shares or refuse any order
to buy shares if the Fund determines that doing so would be in the best
interests of the Fund and its shareholders.
Class M shares
* Initial sales charge of up to 3.50%
* Lower sales charges for larger investments of $50,000 or more
* No deferred sales charge
* Lower annual expenses, and higher dividends, than class B and class C shares
because of lower 12b-1 fee
* Higher annual expenses, and lower dividends, than class A shares because of
higher 12b-1 fee
* No conversion to class A shares, so future 12b-1 fee does not decrease
Initial sales charges for class M shares
Sales charge as a percentage of:
-------------------------------
Net
Amount of purchase amount Offering
at offering price ($) invested price *
- --------------------- -------- ------
Under 50,000 3.63 % 3.50%
50,000 but under 100,000 2.56 2.50
100,000 but under 250,000 1.52 1.50
250,000 but under 500,000 1.01 1.00
500,000 but under 1,000,000 NONE NONE
1,000,000 and above NONE NONE
* Offering price includes sales charge.
Distribution (12b-1) plans
The Fund has adopted distribution plans to pay for the marketing of Fund
shares and for services provided to shareholders. The plans provide for
payments at annual rates (based on average net assets) of up to 1.00% on
class M shares. The Trustees currently limit payments on class M shares to
0.75% of average net assets. Because these fees are paid out of the Fund's
assets on an ongoing basis, they will increase the cost of investors'
investments.
An investor may be eligible to buy Class M Shares at reduced sales charges.
For fiscal 1999, Putnam Mutual Funds Corp. received $16,593,483 in sales
charges for Class M Shares, of which it retained $2,380,597.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any day that is both a Business
Day and any business day of securities companies in Japan during the
Subscription Period mentioned in "8. Period of Subscription, Part I Information
concerning Securities" of a securities registration statement pursuant to the
terms set forth in "Part I. Information concerning Securities" of the relevant
securities registration statement. The Sales Handling Company shall provide to
the investors a contract Concerning a Foreign Securities Transactions Account
and other prescribed contracts (the "Contracts") and receive from such
investors an application for requesting the opening of a transactions account
under the Contracts. The purchase shall be made in the minimum investment
amount of 100 shares. Purchases may be made in integral multiples of 10
shares.
The issue price for Shares shall be, in principle, the Net Asset Value per
Share next calculated on the day on which the Fund has received such
application. The Trade Day in Japan is the day when the Sales Handling Company
confirms the execution of the order (ordinarily the business day in Japan next
following the placement of orders), and the payment and delivery shall be made
on the fourth Business Day after and including the Trade Day. The sales charge
applicable to Class M Shares in Japan shall be 3.5% of the net asset value of
such shares. From such amount, 0.50% of the amount calculated by dividing the
net asset value by (1-0.035) and rounded to three decimal places shall be
retained by Putnam Mutual Fund Corp., principal underwriter of the Fund.
The Investors having entrusted a Sales Handling Company with safekeeping of
the certificates for Fund shares will receive a certificate of safekeeping in
exchange for the purchase price. In such case payment shall be made in yen in
principle and the applicable exchange rate shall be the foreign exchange rate
quoted in the Tokyo Foreign Exchange Market on the Trade Day, which shall be
determined by such Sales Handling Company. The payment may be made in dollars
to the extent that the Sales Handling Company can agree.
In addition, Sales Handling Company in Japan who are members of the Japan
Securities Dealers' Association cannot continue sales of the Shares in Japan
when the net assets of the Fund are less than [YEN] 100,000,000 or the Shares
otherwise cease to comply with the "Standards of Selection of Foreign
Investment Fund Securities" contained in the "Regulations Concerning the
Transactions of Foreign Securities" established by the Association.
(2) Repurchase of Shares:
a. Repurchase in the United States
Investors residing in the U.S. can sell their shares back to the Fund any day
the New York Stock Exchange is open either through investors' financial advisor
or directly to the Fund. Payment for redemptions may be delayed until the Fund
collects the purchase price of shares which may take up to 15 calendar days
after the purchase date.
Selling shares through investors' financial advisor
An investor's advisor must receive the investor's request in proper form before
the close of regular trading on the New York Stock Exchange for the investor to
receive that day's NAV, less any applicable deferred sales charge. An
investor's advisor will be responsible for furnishing all necessary documents
to Putnam Investor Services on a timely basis and may charge the investor for
his or her services.
Selling shares directly to the Fund
Putnam Investor Services must receive an investor's request in proper form
before the close of regular trading on the New York Stock Exchange in order to
receive that day's NAV, less any applicable sales charge.
By mail
Send a signed letter of instruction to Putnam Investor Services. If an
investor has certificates for the shares the investor want to sell, the
investor must include them along with completed stock power forms.
By telephone
An investor may use Putnam's Telephone redemption Privilege to redeem shares
valued at less than $100,000 unless the investor has notified Putnam Investor
Services of an address change within the preceding 15 days. Unless an investor
indicates otherwise on the account application, Putnam Investor Services will
be authorized to accept redemption and transfer instructions received by
telephone.
The Telephone Redemption Privilege is not available if there are certificates
for an investor's shares. The Telephone Redemption Privilege may be modified
or terminated without notice.
Additional documents
If investors
* sell shares with a value of $100,000 or more,
* want investors' redemption proceeds sent to an address other than the
investor's address as it appears on Putnam's records, or
* have notified Putnam of a change in address within the preceding 15 days,
the signatures of registered owners or their legal representatives must be
guaranteed by a bank, broker-dealer or certain other financial
institutions. Stock power forms are available from investors' financial
advisor, Putnam Investor Services and many commercial banks.
Putnam Investor Services usually requires additional documents for the sale of
shares by a corporation, partnership, agent or fiduciary, or a surviving joint
owner. Contact Putnam Investor Services for details.
When will the fund pay investors?
The Fund generally sends an investor payment for the investor's shares the
business day after the investor's request is received. Under unusual
circumstances, the Fund may suspend redemptions, or postpone payment for more
than seven days as permitted by federal securities laws.
Redemption by the Fund
If an investor owns fewer shares than the minimum set by the Trustees
(presently 20 shares), the Fund may redeem the investor's shares without the
investor's permission and send the investor the proceeds. The Fund may also
redeem shares if an investor owns shares more than a maximum amount set by
the Trustees. There is presently no maximum, but the Trustees could set a
maximum that would apply to both present and future shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request repurchase of their Shares.
Repurchase requests in Japan may be made to Investor Servicing Agent through
the Sales Handling Company on a Fund Business Day that is a business day of
securities companies in Japan without a contingent deferred sales charge.
The repurchase shall be made in integral multiples of 10 shares.
The price a shareholder in Japan will receive is the next net asset value
calculated after the Fund receives the repurchase request from Yamatane,
provided the request is received before the close of regular trading on the
New York Stock Exchange. The payment of the price shall be made in yen
through the Sales Handling Company pursuant to the Contracts or, if the Sales
Handling Company agree, in dollars. The payment for repurchase proceeds
shall be made on the fourth business day of securities companies in Japan
after and including the Trade Day.
(3) Suspension of Repurchase:
The Fund may suspend shareholders' right of redemption, or postpone payment
for more than seven days, if the New York Stock Exchange is closed for other
than customary weekends or holidays, or if permitted by the rules of the U.S.
Securities and Exchange Commission during periods when trading on the Exchange
is restricted or during any emergency which makes it impracticable for the Fund
to dispose of its securities or to determine fairly the value of its net
assets, or during any other period permitted by order of the U.S. Securities
and Exchange Commission for protection of investors.
(4) Custody of Shares:
Share certificates shall be held by shareholders at their own risk.
The custody of the Share certificates (if issued) representing Shares sold to
Japanese shareholders shall, unless otherwise instructed by the shareholder,
be held, in the name of the custodian, by the custodian of Yamatane. The Sales
Handling Company to the Japanese shareholders shall deliver certificates of
custody for the Shares.
D. Miscellaneous:
(1) Duration and Liquidation:
Unless terminated, the Fund shall continue without limitation of time. The
Fund may be terminated at any time by vote of Shareholders holding at least
66 2/3% of the Shares entitled to vote or by the Trustees of the Fund by
written notice to the Shareholders.
(2) Accounting Year:
The accounts of the Fund will be closed each year on 30th June.
(3) Authorized Shares:
There is no prescribed authorized number of Shares, and Shares may be issued
from time to time.
(4) Agreement and Declaration of Trust:
Originals or copies of the Agreement and Declaration of Trust, as amended are
maintained in the office of the Fund and are made available for public
inspection for the Shareholders. Originals or copies of the Agreement and
Declaration of Trust, as amended are on file in the United States with the
Secretary of State of The Commonwealth of Massachusetts and with the Clerk of
the City of Boston.
The Agreement and Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series or classes of Shares but not the holders of all outstanding series and
classes shall be authorized by vote of the Shareholders holding a majority of
the Shares entitled to vote of each series and class affected and no vote of
Shareholders of a series or class not affected shall be required. Amendments
having the purpose of changing the name of the Fund or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
In Japan, material changes in the Agreement and Declaration of Trust shall be
published and sent to the Japanese Shareholders.
(5) Issue of Warrants, Subscription Rights, etc.:
The Fund may not grant privileges to purchase shares of the Fund to
shareholders or investors by issuing warrants, subscription rights or options,
or other similar rights.
(6) How Performance Is Shown:
Fund advertisements may, from time to time, include performance information.
"Total return" for the one-, five- and ten-year periods (or for the life of
the Fund, if shorter) through the most recent calendar quarter represents the
average annual compounded rate of return on an investment of $1,000 in the Fund
invested at the maximum public offering price (in the case of Class M Shares).
Total return may also be presented for other periods or based on investment at
reduced sales charge levels. Any quotation of investment performance not
reflecting the maximum initial sales charge or contingent deferred sales charge
would be reduced if the sales charge were used.
For the one-year, five-year and the life of the Fund periods ended
June 30, 1999, the average annual total return for Class M shares was -6.74%,
17.86% and 14.56%, respectively. Returns for Class M shares for periods prior
to their inception are derived from the performance of the Fund's Class A
Shares, adjusted to reflect the deduction of the initial sales charge currently
applicable to Class M Shares.
All data are based on past investment results and do not predict future
performance. Investment performance, which will vary, is based on many
factors, including market conditions, portfolio composition, Fund operating
expenses and the class of shares the investor purchases. Investment
performance also often reflects the risks associated with the Fund's investment
objective and policies. These factors should be considered when comparing the
Fund's investment results with those of other mutual funds and other investment
vehicles.
Quotations of investment performance for any period when an expense limitation
was in effect will be greater than if the limitation had not been in effect.
Fund performance may be compared to that of various indexes.
(B) Outline of Disclosure System:
(1) Disclosure in U.S.A.:
(i) Disclosure to shareholders
In accordance with the Investment Company Act of 1940, the Fund is required to
send to its shareholders annual and semi-annual reports containing financial
information.
(ii) Disclosure to the SEC
The Fund has filed a registration statement with the SEC on Form N-1A; the Fund
updates that registration statement annually in accordance with the Investment
Company Act of 1940.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i) Disclosure Required under the Securities and Exchange Law:
When the Fund intends to offer the Shares amounting to more than certain amount
in yen in Japan, it shall submit to the Director of Kanto Local Finance Bureau
of the Ministry of Finance of Japan securities registration statements together
with the copies of the Agreement and Declaration of the Fund and the agreements
with major related companies as attachments thereto. The said documents are
made available for public inspection for investors and any other persons who
desire at the Kanto Local Finance Bureau of the Ministry of Finance.
The Sales Handling Company of the Shares shall deliver to the investors
prospectuses the contents of which are substantially identical to Part I and
Part II of the securities registration statements. For the purpose of
disclosure of the financial conditions, etc., the Trustees shall submit to the
Director of Kanto Local Finance Bureau of the Ministry of Finance of Japan
securities reports within 6 months of the end of each fiscal year, semi-annual
reports within 3 months of the end of each semi-annual period and
extraordinary reports from time to time when changes occur as to material
subjects of the Fund. These documents are available for public inspection for
the investors and any other persons who so desire at the Kanto Local Finance
Bureau of the Ministry of Finance.
(ii) Notifications, etc. under the Law Concerning Securities Investment
Trusts and Securities Investment Companies
If the Investment Management Company conducts the business of offering for sale
shares of the Fund, it must file in advance certain information relating to the
Fund with the Commissioner of Financial Supervisory Agent under the Law
Concerning Securities Investment Trusts and Securities Investment Companies
(the Law No. 198, 1951) (hereinafter referred to the "Investment Trusts Law").
In addition, if the Investment Management Company amends the Agreement and
Declaration of Trust of the Fund, it must file in advance such amendment and
the details thereof with the Commissioner of Financial Supervisory Agent.
Further, the Investment Management Company must prepare the Management Report
on the prescribed matters concerning the assets of the Fund under the
Investment Trusts Law immediately after the end of each calculation period of
the Fund and must file such Report with the Commissioner of Financial
Supervisory Agent.
b. Disclosure to Japanese Shareholders:
If the Investment Management Company makes any amendment to the Agreement
and Declaration of Trust of the Fund, the substance of which is important,
it must give, in advance, public notice concerning its intention to make
such amendment and the substance of such amendment at least 30 days prior
to such amendment, and must deliver written documents containing the
amendment to the shareholders known in Japan. Provided, however, that if
such written documents are delivered to all the shareholders in Japan, the
relevant public notice is not required to be given.
The Japanese Shareholders will be notified of changes in material facts which
would change their position, including notices from the Trustees, through the
Sales Handling Companies.
The above-described Management Report on the Fund will be sent to the
shareholders known in Japan.
(C) Restrictions on Transactions with Interested Parties:
Portfolio securities of the Fund may not be purchased from, sold or loaned to
any Trustee of the Fund, Putnam Investment Management, Inc., acting as
investment adviser of the Fund, or any affiliate thereof or any of their
directors, officers, or employees, or any major shareholder thereof (meaning a
shareholder who holds to the actual knowledge of Investment Management Company,
on his own account whether in his own or other name (as well as a nominee's
name), 10% or more of the total issued outstanding shares of such a company)
acting as principal or for their own account unless the transaction is made
within the investment restrictions set forth in the Fund's prospectus and
statement of additional information and either (i) at a price determined by
current publicly available quotations (including a dealer quotation) or (ii)
at competitive prices or interest rates prevailing from time to time on
internationally recognized securities markets or internationally recognized
money markets (including a dealer quotation).
4. INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY SHAREHOLDERS, ETC.
(A) Rights of Shareholders and Procedures for Their Exercise:
Shareholders must register their shares in their own name in order to exercise
directly their rights as Shareholders. Therefore, the Shareholders in Japan
who entrust the custody of their Shares to the Sales Handling Company cannot
directly exercise their Shareholder rights, because their Shares are registered
in the name of the custodian. Shareholders in Japan may have the Sales
Handling Company exercise their rights on their behalf in accordance with the
Contracts with the Sales Handling Company.
Shareholders in Japan who do not entrust the custody of their Shares to the
Sales Handling Companies may exercise their rights in accordance with their
own arrangement under their own responsibility.
The major rights enjoyed by Shareholders are as follows:
(i) Voting rights
Each share has one vote, with fractional shares voting proportionally. Shares
of each class will vote together as a single class except when otherwise
required by law or as determined by the Trustees. Although the Fund is not
required to hold annual meetings of its shareholders, shareholders holding at
least 10% of the outstanding shares entitled to vote have the right to call a
meeting to elect or remove Trustees, or to take other actions as provided in
the Agreement and Declaration of Trust.
(ii) Repurchase rights
Shareholders are entitled to request repurchase of Shares at their Net Asset
Value at any time.
(iii) Rights to receive dividends
Shareholders are entitled to receive any distributions from net investment
income and any net realized capital gains at least annually. Distributions
from net investment income, if any, are expected to be small. Distributions
from capital gains are made after applying any available capital loss
carryovers.
Shareholders may choose from three distribution options, though investors in
Japan may only choose the last alternative.
* Reinvest all distributions in additional shares without a sales charge;
* Receive distributions from net investment income in cash while reinvesting
capital gains distributions in additional shares without a sales charge; or
* Receive all distributions in cash.
(iv) Right to receive distributions upon dissolution
Shareholders of the Fund are entitled to receive distributions upon dissolution
in proportion to the number of shares then held by them, except as otherwise
required.
(v) Right to inspect accounting books and the like
Shareholders are entitled to inspect the Agreement and Declaration of Trust,
the accounting books at the discretion of the Court and the minutes of any
shareholders' meetings.
(vi) Right to transfer shares
Shares are transferable without restriction except as limited by applicable
law.
(vii) Rights with respect to the U.S. registration statement
If, under the 1933 Act, there is, at any time it became effective, any material
false or mislead statement in the U.S. registration statement, or any omission
of any material statement required to be stated therein or necessary to cause
the statements made therein to be materially misleading, shareholders are
generally entitled to institute a lawsuit, against the person who had signed
the relevant Registration Statement, the trustees of the issuer (or any person
placed in the same position), any person involved in preparing such Statement
or any underwriter of the relevant shares.
(B) Tax Treatment of Shareholders in Japan:
The tax treatment of Shareholders in Japan shall be as follows:
(1) The distributions to be made by the Fund will be treated as
distributions made by a domestic investment trust.
a. The distributions to be made by the Fund to Japanese individual
shareholders will be subject to separate taxation from other income (i.e.
withholding of income tax at the rate of 15% and withholding of local taxes
at the rate of 5% in Japan). In this case, no report concerning
distributions will be filed with the Japanese tax authorities.
b. The distributions to be made by the Fund to Japanese corporate
shareholders will be subject to withholding of income tax at the rate of
15% and to withholding of local taxes at the rate of 5% in Japan. In
certain cases, the Sales Handling Companies will prepare a report
concerning distributions and file such report with the Japanese tax
authorities.
c. Net investment returns such as dividends, etc. and distributions of
short-term net realized capital gain, among distributions on Shares of the
Fund, will be, in principle, subject to withholding of U.S. federal income
tax at the rate of 15% and the amount obtained after such deduction will be
paid in Japan.
Distributions of long-term net realized capital gain will not be subject to
withholding of U.S. federal income tax and the full amount thereof will be
paid in Japan. The amount subject to withholding of U.S. federal income tax
may be deducted from the tax levied on a foreign entity in Japan.
The Japanese withholding tax imposed on distributions as referred to in a.
and b. above will be collected by way of so-called "difference collecting
method." In this method only the difference between the amount equivalent to
20% of the distributions before U.S. withholding tax and the amount of U.S.
withholding tax withheld in the U.S. will be collected in Japan.
(2) The provisions of Japanese tax laws giving the privilege of a certain
deduction from taxable income to corporations, which may apply to dividends
paid by a domestic corporation, shall not apply.
(3) Capital gains and losses arising from purchase and repurchase of the
Shares shall be treated in the same way as those arising from purchase and
sale of a domestic investment trust. The distribution of the net
liquidation assets shall be also treated in the same way as those arising
from liquidation of a domestic investment trust.
(4) The Japanese securities transaction tax will not be imposed so far as
the transactions concerned are conducted outside Japan. Such tax, however,
is applicable to dealers' transactions for their own account and to
privately negotiated transactions conducted in Japan.
(C) Foreign Exchange Control in U.S.A.:
In U.S.A., there are no foreign exchange control restrictions on remittance
of dividends, repurchase money, etc. of the Shares to Japanese shareholders.
(D) Agent in Japan:
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
The foregoing law firm is the true and lawful agent of the Fund to represent
and act for the Fund in Japan for the purpose of;
(1) the receipt of any and all communications, claims, actions, proceedings
and processes as to matters involving problems under the laws and the rules
and regulations of the JSDA and
(2) representation in and out of court in connection with any and all
disputes, controversies or differences regarding the transactions relating
to the public offering, sale and repurchase in Japan of the Shares of the
Fund.
The agent for the registration with the Director of Kanto Local Finance
Bureau of the Ministry of Finance of the initial public offering concerned as
well as for the continuous disclosure is each of the following persons:
Harume Nakano
Ken Miura
Attorneys-at-law
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki, 3-chome
Chiyoda-ku, Tokyo
(E) Jurisdiction:
Limited only to litigation brought by Japanese investors regarding transactions
relating to (D)(2) above, the Fund has agreed that the following court has
jurisdiction over such litigation and the Japanese law is applicable thereto:
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Portfolio
- -------------------------------------------------------------------------------
(As of the end of October 1999)
- -------------------------------------------------------------------------------
Investment Ratio
Types of Assets Name of Country Total USD (%)
- -------------------------------------------------------------------------------
Common Stock United Kingdom 585,764,856 33.09
- -------------------------------------------------------------------------------
France 335,802,745 18.97
- -------------------------------------------------------------------------------
Netherlands 176,414,450 9.97
- -------------------------------------------------------------------------------
Switzerland 114,642,733 6.48
- -------------------------------------------------------------------------------
Italy 112,432,549 6.35
- -------------------------------------------------------------------------------
Germany 99,285,599 5.61
- -------------------------------------------------------------------------------
Sweden 79,671,800 4.50
- -------------------------------------------------------------------------------
Ireland 65,363,475 3.69
- -------------------------------------------------------------------------------
Spain 62,789,270 3.55
- -------------------------------------------------------------------------------
Finland 51,404,672 2.90
- -------------------------------------------------------------------------------
Portugal 31,223,962 1.76
- -------------------------------------------------------------------------------
Canada 12,816,397 0.72
- -------------------------------------------------------------------------------
Greece 27 0.00
-------------- --------------
- -------------------------------------------------------------------------------
Sub-total 1,727,612,535 97.60
- -------------------------------------------------------------------------------
Cash, Deposit and Other
Assets (After deduction
of liabilities 42,490,926 2.40
- -------------------------------------------------------------------------------
Total 1,770,103,461 100.00
- -------------------------------------------------------------------------------
(Net Asset Value) (\185,861 million)
- -------------------------------------------------------------------------------
Note: Investment ration is calculated by dividing each asset at its market
value by the total Net Asset Value of the Fund. The same applies hereinafter.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the following fiscal years and at
the end of each month within one year prior to the end of October 1999 is as
follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Total Net Asset Value Net Asset Value per Share
- -------------------------------------------------------------------------------
USD (thousands) Yen (millions) USD Yen
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Fiscal Year $746 78 $13.90 1,460
- -------------------------------------------------------------------------------
(June 30, 1995)
- -------------------------------------------------------------------------------
2nd Fiscal Year 4,047 425 15.86 1,665
- -------------------------------------------------------------------------------
(June 30, 1996)
- -------------------------------------------------------------------------------
3rd Fiscal Year 15,811 1,660 18.85 1,979
- -------------------------------------------------------------------------------
(June 30, 1997)
- -------------------------------------------------------------------------------
4th Fiscal Year 42,614 4,474 23.51 2,469
- -------------------------------------------------------------------------------
(June 30, 1998)
- -------------------------------------------------------------------------------
5th Fiscal Year 97,950 10,285 21.48 2,255
- -------------------------------------------------------------------------------
(June 30, 1999)
================================================================================
1998 End of November 142,392 14,951 21.92 2,302
- -------------------------------------------------------------------------------
December 212,900 22,355 21.56 2,264
- -------------------------------------------------------------------------------
1999 End of January 140,921 14,797 21.97 2,307
- -------------------------------------------------------------------------------
February 171,214 17,977 21.43 2,250
- -------------------------------------------------------------------------------
March 156,614 16,444 21.41 2,248
- -------------------------------------------------------------------------------
April 128,110 13,452 21.56 2,264
- -------------------------------------------------------------------------------
May 104,598 10,983 21.05 2,210
- -------------------------------------------------------------------------------
June 97,950 10,285 21.48 2,255
- -------------------------------------------------------------------------------
July 93,660 9,834 21.79 2,288
- -------------------------------------------------------------------------------
August 89,613 9,409 21.77 2,286
- -------------------------------------------------------------------------------
September 86,166 9,047 21.74 2,283
- -------------------------------------------------------------------------------
October 89,671 9,415 22.54 2,367
- -------------------------------------------------------------------------------
</TABLE>
(Note) Operations of Class M Shares were commenced on December 1, 1994.
<TABLE>
<CAPTION>
(2) Record of Distributions Paid
Class M Shares
- -------------------------------------------------------------------------------
Period Amount of Dividend paid per Share
- -------------------------------------------------------------------------------
Income Capital Gains
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Fiscal Year (12/1/94-6/30/95) -- -- $0.16 (\16.80)
- -------------------------------------------------------------------------------
2nd Fiscal Year (7/1/95-6/30/96) -- -- $0.40 (\42.00)
- -------------------------------------------------------------------------------
3rd Fiscal Year (7/1/96-6/30/07) $0.17 (\17.85) $1.06 (\111.30)
- -------------------------------------------------------------------------------
4th Fiscal Year (7/1/97-6/30/98) $0.30 (\31.50) $1.13 (\118.65)
- -------------------------------------------------------------------------------
5th Fiscal Year (7/1/98-6/30/99) $0.20 (\21.00) $1.00 (\105.00)
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(Note) Record of distribution paid from December 1996 to December 1999 are
as follows:
- -------------------------------------------------------------------------------
Dividend Nav per Share
- -------------------------------------------------------------------------------
Ex-dividend Date Dollar Yen Dollar
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1996 December 20 $1,230 129.15 $16.11
- -------------------------------------------------------------------------------
1997 December 19 $1,430 150.15 $18.09
- -------------------------------------------------------------------------------
1998 December 18 $1,196 125.58 $20.76
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following fiscal years and
number of outstanding Shares of the Fund as of the end of such Fiscal Years
are as follows:
Class M Shares
- ----------------------------------------------------------------------------------
Number of Net Increase Number of
Number of Shares (Decrease) in Outstanding
Shares Sold Repurchased Shares Outstanding Shares
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Fiscal Year 91,235 37,562 53,673 53,673
(12/1/94-6/30/95) (0) (0) (0) (0)
- ----------------------------------------------------------------------------------
2nd Fiscal Year 297,970 96,466 201,504 255,177
(7/1/95-6/30/96) (0) (0) (0)
- ----------------------------------------------------------------------------------
3rd Fiscal Year 1,962,484 1,378,637 583,847 839,024
(7/1/96-6/30/97) (0) (0) (0)
- ----------------------------------------------------------------------------------
4th Fiscal Year 2,299,229 1,325,283 973,946 1,812,970
(7/1/97-6/30/98) (0) (0) (0)
- ----------------------------------------------------------------------------------
5th Fiscal Year 23,075,809 20,329,254 2,746,555 4,559,525
(7/1/98-6/30/99) (20,278,650) (17,589,760) (2,688,890) (2,688,890)
- ----------------------------------------------------------------------------------
</TABLE>
Note: The number of Shares sold, repurchased and outstanding in the parentheses
represents those sold, repurchased and outstanding in Japan. The Shares
have started to sell in Japan since July 1, 1998.
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized in Massachusetts, U.S.A.
on November 10, 1988.
Chapter 182 of the Massachusetts General Laws prescribes the fundamental
matters in regard to the operations of certain business trusts constituting
voluntary associations under that chapter.
The Fund is an open-end, diversified management company under the Investment
Company Act of 1940.
(B) Outline of the Supervisory Authority
Refer to I - l (B) Outline of the Supervisory Authority.
(C) Purpose of the Fund
The purpose of the Fund is to provide investors a managed investment primarily
in securities, debt instruments and other instruments and rights of a financial
nature.
(D) History of the Fund
Organization of the Fund as a Massachusetts business trust.
Adoption of the Agreement and Declaration of Trust. November 10, 1988:
Adoption of the Amended and Restated Agreement
and Declaration of Trust July 13, 1990
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Fund
The Trustees are responsible for generally overseeing the conduct of the
Fund's business. The Agreement and Declaration of Trust provides that they
shall have all powers necessary or convenient to carry out that responsibility.
The number of Trustees is fixed by the Trustees and may not be less than
three. A Trustee may be elected either by the Trustees or by the shareholders.
At any meeting called for the purpose, a Trustee may be removed by vote of
two-thirds of the outstanding shares of the Fund. Each Trustee elected by the
Trustees or the shareholders shall serve until he or she retires, resigns, is
removed, or dies or until the next meeting of shareholders called for the
purpose of electing Trustees and until the election and qualification of his
or her successor.
The Trustees of the Fund are authorized by the Agreement and Declaration of
Trust to issue shares of the Fund in one or more series, each series being
preferred over all other series in respect of the assets allocated to that
series. The Trustees may, without shareholder approval, divide the shares of
any series into two or more classes, with such preferences and special or
relative rights and privileges as the Trustees may determine.
Under the Agreement and Declaration of Trust the shareholders shall have
power, as and to the extent provided therein, to vote only (i) for the
election of Trustees, to the extent provided therein, (ii) for the removal of
Trustees, to the extent provided therein, (iii) with respect to any investment
adviser, to the extent provided therein, (iv) with respect to any termination
of the Fund, to the extent provided therein, (v) with respect to certain
amendments of the Agreement and Declaration of Trust, (vi) to the same extent
as the stockholders of a Massachusetts business corporation as to whether or
not a court action, proceeding, or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Fund or the
shareholders, and (vii) with respect to such additional matters relating to
the Fund as may be required by the Agreement and Declaration of Trust, the
Bylaws of the Fund, or any registration of the Fund with the U.S. Securities
and Exchange Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Certain of the foregoing
actions may, in addition, be taken by the Trustees without vote of the
shareholders of the Fund.
On any matter submitted to a vote of shareholders, all shares of the Fund then
entitled to vote are voted in the aggregate as a single class without regard
to series or classes of shares, except (1) when required by the Investment
Company Act of 1940, as amended, or when the Trustees hall have determined
that the matter affects one or more series or classes of shares materially
differently, share are voted by individual series or class; and (2) when the
Trustees have determined that the matter affects only the interests of one or
more series or classes, then only shareholders of such series or classes are
entitled to vote thereon. There is no cumulative voting.
Meetings of shareholders may be called by the Clerk whenever ordered by the
Trustees, the Chairman of the Trustees, or requested in writing by the holder
or holders of at least one-tenth of the outstanding shares entitled to vote at
the meeting. Written notice of any meeting of shareholders must be given by
mailing the notice at least seven days before the meeting. Thirty percent of
shares entitled to vote on a particular matter is a quorum for the transaction
of business on that matter at a shareholders' meeting, except that, where any
provision of law or of the Agreement and Declaration of Trust permits or
requires that holders of any series or class vote as an individual series or
class, then thirty percent of the aggregate number of shares of that series or
class entitled to vote are necessary to constitute a quorum for the transaction
of business by that series or class. For the purpose of determining the
shareholders of any class or series of shares who are entitled to vote or act
at any meeting, or who are entitled to receive payment of any dividend or other
distribution, the Trustees are authorized to fix record dates, which may not be
more then 90 days before the date of any meeting of shareholders or more than
60 days before the date of payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and Declaration of Trust to adopt
Bylaws not inconsistent with the Agreement and Declaration of Trust providing
for the conduct of the business of the Fund. The Bylaws contemplate that the
Trustees shall elect a Chairman of the Trustees, the President, the Treasurer,
and the Clerk of the Fund, and that other officers, if any, may be elected or
appointed by the Trustees at any time. The Bylaws may be amended or repealed,
in whole or in part, by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings signed by such a majority.
Regular meetings of the Trustees may be held without call or notice at such
places and at such times as the Trustees may from time to time determine. It
shall be sufficient notice to a Trustee of a special meeting to send notice by
mail at least forty-eight hours or by telegram at least twenty-four hours
before the meeting or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting.
At any meeting of Trustees, a majority of the Trustees then in office shall
constitute a quorum. Except as otherwise provided in the Agreement and
Declaration of Trust or Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting (a quorum being
present), or by written consents of a majority of the Trustees then in office.
Subject to a favorable majority shareholder vote (as defined in the Agreement
and Declaration of Trust), the Trustees may contract for exclusive or
nonexclusive advisory and/or management services with any corporation, trust,
association, or other organization.
The Agreement and Declaration of Trust contains provisions for the
indemnification of Trustees, officers, and shareholders of the Fund under
the circumstances and on the terms specified therein.
The Fund may be terminated at any time by vote of shareholders holding at
least two-thirds of the shares entitled to vote or by the trustees by written
notice to the shareholders. Any series of shares may be terminated at any time
by vote of shareholders holding at least two-thirds of the shares of such
series entitled to vote or by the Trustees by written notice to the
shareholders of such series.
The foregoing is a general summary of certain provisions of the Agreement and
Declaration of Trust and Bylaws of the Fund, and is qualified in its entirety
by reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
(H) Information Concerning Directors, Officers and Employees
<TABLE>
<CAPTION>
(1) Trustees and Officers of the Fund (as of October 31, 1999)
- --------------------------------------------------------------------------------------
Shares
Name Office and Title Resume Owned
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George Putnam Chairman and present: Chairman and 5,388
President Director
of Putnam
Investment
Management, Inc.
and Putnam
Mutual Funds
Corp.
Director of
Freepost
Copper and
Gold, Inc.,
Houghton
Mifflin
Company and
Marsh & McLennan
Companies, Inc.
- --------------------------------------------------------------------------------------
John A. Hill Vice Chairman present: Chairman and 4,517
Managing Director
of Synder Oil
Corporation,
TransMontaigue
Oil Company and
First Reserve
Corporation
- --------------------------------------------------------------------------------------
William F. Pounds Vice Chairman present: Professor Emeritus 8,803
of Management,
Alfred P. Sloan
School of
Management,
Massachusetts
Institute of
Technology,
Director of IDEXX
Laboratories, Inc.,
Management Sciences
for Health, Inc. and
Sun Company, Inc.
- --------------------------------------------------------------------------------------
Jameson Adkins Baxter Trustee present: President, Baxter 680
Associates, Inc.,
Director of MB
Financial, Inc.,
ASHTA Chemicals,
Inc., Barta
Corporation and
Ryerson Tull, Inc.
- --------------------------------------------------------------------------------------
Hans H. Estin Trustee present: Vice Chairman, 415
North American
Management Corp.
- --------------------------------------------------------------------------------------
Ronald J. Jackson Trustee present: Former Chairman, 1,191
President and
Chief Executive
Officer of
Fisher-Price, Inc.
- --------------------------------------------------------------------------------------
Paul. L. Joskow Trustee present: Professor of 0
Economics and
Management and
Director of the
Center for Energy
and Environmental
Policy Research at
the Massachusetts
Institute of
Technology, Director
of New England
Electric System,
State Farm Indemnity
Company and Whitehead
Institute for
Biomedical Research
- --------------------------------------------------------------------------------------
Elizabeth T. Kennan Trustee present: President Emeritus 313
and Professor of
Mount Holyoke
College, Director
of Bell Atlantic,
The Kentucky Home
Life Insurance
Companies, Northern
Utilities and Talbo
- --------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and present: President, Chief 108
Vice President Executive Officer
and Director of
Putnam Investments,
Inc. and Putnam
Investment Management,
Inc. Director, Marsh &
McLennan Companies,
Inc.
- --------------------------------------------------------------------------------------
John H. Mullin, III Trustee present: Chairman and Chief 577
Executive Officer
of Ridgeway Farm,
Director of ACX
Technologies, Inc.,
Alex. Brown Realty,
Inc. and The Liberty
Corporation
- --------------------------------------------------------------------------------------
Robert E. Patterson Trustee present: President and 1,709
Trustee of Cabot
Industrial Trust
and Director of
Broadywine Trust
Company
- --------------------------------------------------------------------------------------
George Putnam, III Trustee present: President, New 327
Generation Research,
Inc. and New
Generation Advisers,
Inc.
- --------------------------------------------------------------------------------------
A.J.C. Smith Trustee present: Chairman and Chief 138
Executive Officer,
Marsh & McLennan
Companies, Inc. and
Director of Trident
Partnership
- --------------------------------------------------------------------------------------
W. Thomas Stephens Trustee present: President and 117
Chief Executive
Officer of
MacMillan Bloedel,
Ltd. Director of
Qwest Communications
and New Century
Energies
- --------------------------------------------------------------------------------------
W. Nicholas Thorndike Trustee present: Director of various 129
corporations and
charitable
organizations,
including Cavrid
Corporation, Data
General Corporation,
Bradley Real Estate,
Inc. and Providence
Journal Co.
- --------------------------------------------------------------------------------------
Charles E. Porter Executive Vice present: Managing Director 0
President of Putnam Investments,
Inc. and Putnam
Investment
Management, Inc.
- --------------------------------------------------------------------------------------
John D. Hughes Senior Vice present: Senior Vice 0
President and Presidnet of
Treasurer Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice present: Senior Vice 0
President President of
Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Ian C. Ferguson Vice President present: Senior Managing 0
Director of Putnam
Investments, Inc.
and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Gordon H. Silver Vice President present: Director and Senior 10,756
Managing Director
of Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Brett C. Browchuk Vice President present: Managing Director 0
of Putnam Investment
Management, Inc.
- --------------------------------------------------------------------------------------
John R. Verani Vice President present: Senior Vice 0
President of Putnam
Investments, Inc.
and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
John J. Morgan, Jr. Vice President present: Managing Director 0
of Putnam
Investments, Inc.
and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Richard Monaghan Vice President present: Managing Director 0
of Putnam Investments,
Inc. and Putnam
Mutual Funds Corp.
- --------------------------------------------------------------------------------------
Nigel P. Hart Vice President present: Senior Vice President 0
of Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Omid Kamshad Vice President present: Managing Director 0
of Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Mark D. Pollard Vice President present: Senior Vice President 0
of Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Justin M. Scott Vice President present: Managing Director of 0
Putnam Investments,
Inc. and Putnam
Investment Management,
Inc.
- --------------------------------------------------------------------------------------
Nicholas Melhuish Vice President Present: Vice President of 0
Putnam Investments,
Inc. and Putnam
Investment
Management, Inc.
- --------------------------------------------------------------------------------------
Paul G. Bucuvalas Assistant present: N/A
Treasurer
- --------------------------------------------------------------------------------------
Judith Cohen Associate Clerk present: N/A 381
and Assistant
Treasurer
- --------------------------------------------------------------------------------------
</TABLE>
(2) Employees of the Fund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund may carry out any administrative and managerial act, including the
purchase, sale, subscription and exchange of any securities and the exercise
of all rights directly or indirectly pertaining to the Fund's assets. The
Fund has retained Putnam Investment Management, Inc., the investment adviser,
to render investment advisory services and Putnam Fiduciary Trust Company, to
hold the assets of the Fund in custody and act as Investor Servicing Agent.
(J) Miscellaneous
(1) Changes of Trustees and Officers
Trustees may be removed or replaced by, among other things, a resolution
adopted by a vote of two-thirds of the outstanding shares at a meeting called
for the purpose. In the event of vacancy, the remaining Trustees may fill
such vacancy by appointing for the remaining term of the predecessor Trustee
such other person as they in their discretion shall see fit. The Trustees may
add to their number, as they consider appropriate. The Trustees may elect and
remove officers, as they consider appropriate.
(2) Amendment to the Agreement and Declaration of Trust
Generally, approval of shareholders is required to amend the Agreement and
Declaration of Trust, except for certain matters such as change of name, curing
any ambiguity or curing any defective or inconsistent provision.
(3) Litigation and Other Significant Events
Nothing which has or which would have a material adverse effect on the Fund has
occurred which is required to be disclosed and has not been disclosed. The
fiscal year end of the Fund is June 30. The Fund is established for an
indefinite period and may be dissolved at any time by vote of the shareholders
holding at least two-thirds of the shares entitled to vote or by the Trustees
by written notice to shareholders.
2. Putnam Investment Management, Inc. (Investment Management Company)
(A) Law of Place of Incorporation
Putnam is incorporated under the General Corporation Law of The Commonwealth
of Massachusetts, U.S.A. Its investment advisory business is regulated under
the Investment Advisers Act of 1940.
Under the Investment Advisers Act of 1940, an investment adviser means, with
certain exceptions, any person who, for compensation, engages in the business
of advising others, either directly or through publications or writings, as to
the value of securities or as to the advisability of investing in, purchasing
or selling securities, or who, for compensation and as part of a regular
business, issues analyses or reports concerning securities. Investment
advisers under the Act may not conduct their business unless they are
registered with the SEC.
(B) Outline of the Supervisory Authority
Investment Management Company is registered as an investment adviser under
the Investment Advisers Act of 1940.
(C) Purpose of the Company
Investment Management Company's sole business is investment management, which
includes the buying, selling, exchanging and trading of securities of all
descriptions on behalf of mutual funds in any part of the world.
(D) History of the Company
Investment Management Company is one of America's oldest and largest money
management firms. Investment Management Company's staff of experienced
portfolio managers and research analysts selects securities and constantly
supervises the fund's portfolio. By pooling an investor's money with that of
other investors, a greater variety of securities can be purchased than would be
the case individually: the resulting diversification helps reduce investment
risk. Investment Management Company has been managing mutual funds since 1937.
Today, the firm serves as the Investment Management Company for the funds in
the Putnam Family, with nearly $251 billion in assets in over nearly 12
million shareholder accounts at the end of October 1999. An affiliate, The
Putnam Advisory Company, Inc., manages domestic and foreign institutional
accounts and mutual funds, including the accounts of many Fortune 500
companies. Another affiliate, Putnam Fiduciary Trust Company, provides
investment advice to institutional clients under its banking and fiduciary
powers as well as shareholder and custody services to the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual Funds and Putnam Fiduciary
Trust Company are subsidiaries of Putnam Investments, Inc., which is located at
One Post Office Square, Boston, Massachusetts 02109 and except for a minority
stake owned by employees, is owned by Marsh & McLennan Companies, Inc., a
publicly-owned holding company whose principal businesses are international
insurance and reinsurance brokerage, employee benefit consulting and
investment management.
(E) Amount of Capital Stock (as of the end of October 1999)
1. Amount of Capital (issued capital stock at par value):
Common Stock 1,000 shares at $1 par value
2. Number of authorized shares of capital stock:
Common Stock 1,000 shares
3. Number of outstanding shares of capital stock:
Common Stock 1,000 shares
4. Amount of capital (for the purposes of this Item, "Amount of Capital"
means total stockholders' equity for the past five years):
Amount of Capital
Year (Total Stockholders' Equity)
- ----------- ----------------------------
End of 1995 $ 45,521,351
End of 1996 $ 45,817,658
End of 1997 $ 48,617,160
End of 1998 $425,782,008
(F) Structure of the Management of the Company
Investment Management Company is ultimately managed by its Board of
Directors, which is elected by its shareholders.
Each fund managed by Investment Management Company is managed by one or
more portfolio managers. These managers, in coordination with analysts
who research specific securities and other members of the relevant
investment group (in the case of the Fund, Investment Management Company's
Global Core and Growth Equities Group), provide a continuous investment
program for the Fund and place all orders for the purchase and sale of
portfolio securities.
The investment performance and portfolio of each Fund is overseen by its
Board of Trustees, a majority of whom are not affiliated with Investment
Management Company. The Trustees meet 11 times a year and review the
performance of each fund with its manager at least quarterly.
In selecting portfolio securities for the Fund, Investment Management
Company looks for securities that represent attractive values based on
careful issue-by-issue credit analysis and hundreds of onsite visits and
other contacts with issuers every year. Investment Management Company is
one of the largest managers of equity, high yield and other debt securities
in the United States.
The following officers of Investment Management Company have had primary
responsibility for the day-to-day management of the Fund's portfolio since
the years stated below. Their recent professional experience is also shown.
<TABLE>
<CAPTION>
(as of the end of October 1999)
- ----------------------------------------------------------------------------------
Manager Since Experience
- ----------------------------------------------------------------------------------
<S> <C> <C>
Omid Kamshad 1996 Employed by Putnam Management since 1996.
Managing Director Prior to January 1996, Mr.Kamshad was
employed at Lombard Odier International
and prior to April 1995, he was employed
at Baring Asset Management Company.
- ----------------------------------------------------------------------------------
Mark D. Pollard 1995 Employed by Putnam Management since 1990.
Managing Director
- ----------------------------------------------------------------------------------
Nigel P. Hart 1998 Employed by Putnam Management since 1997.
Senior Vice President Prior to November, 1997 Mr. Hart was
employed at IAI International.
- ----------------------------------------------------------------------------------
Nicholas Melhuish 1999 Employed by Putnam Management since 1999.
Vice President Prior to August 1999, Mr. Melhuish was
employed at Schroder Investment Management.
- ----------------------------------------------------------------------------------
</TABLE>
(G) Information Concerning Major Stockholders
As of the end of October 1999, all the outstanding shares of capital stock of
Investment Management Company were owned by Putnam Investments, Inc. See
subsection D above.
(H) Information Concerning Officers and Employees
The following table lists the names of various officers and directors of
Investment Management Company and their respective positions with Investment
Management Company. For each named individual, the table lists: (i) any other
organizations (excluding other Investment Management Company's funds) with
which the officer and/or director has recently had or has substantial
involvement; and (ii) positions held with such organization:
<TABLE>
<CAPTION>
List of Officers and Directors of Investment Management Company
(as of the end of October 1999)
- -------------------------------------------------------------------------------------
Position with
Putnam Investment Other Business
Name Management, Inc. Affiliation
- -------------------------------------------------------------------------------------
<S> <C> <C>
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
- -------------------------------------------------------------------------------------
2 Lasser, Lawrence J. President and Director,
CEO
- -------------------------------------------------------------------------------------
3 Silver, Gordon H. Director and Senior Director of Putnam Fiduciary
Managing Director Trust Company and Senior
Managing Director of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
4 Burke, Robert W. Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
5 Collman, Kathleen M. Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
6 Ferguson, Ian C. Senior Managing Director
- -------------------------------------------------------------------------------------
7 Oristaglio, Stephen Senior Managing Director
- -------------------------------------------------------------------------------------
8 Regan, Anthony W. Senior Managing Director
- -------------------------------------------------------------------------------------
9 Spiegel, Steven Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
10 Anderson, Blake E. Managing Director
- -------------------------------------------------------------------------------------
11 Beck, Robert R. Managing Director
- -------------------------------------------------------------------------------------
12 Bresnahan, Leslee R. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
13 Browchuk, Brett C. Managing Director
- -------------------------------------------------------------------------------------
14 Cassaro, Joseph A. Managing Director
- -------------------------------------------------------------------------------------
15 Cotner, C. Beth Managing Director
- -------------------------------------------------------------------------------------
16 Cronin, Kevin M. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
17 D'Alelio, Edward H. Managing Director
- -------------------------------------------------------------------------------------
18 Daly, Kenneth L. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
19 DeTore, John A. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
20 Durgarian, Karnig H. Managing Director Director and Managing
Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
21 Esteves, Irene M. Managing Director Treasurer of Putnam
and Chief Financial Fiduciary Trust Company
Officer
- -------------------------------------------------------------------------------------
22 Farrell, Deborah S. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
23 Gillis, Roland Managing Director
- -------------------------------------------------------------------------------------
24 Haslett, Thomas R. Managing Director
- -------------------------------------------------------------------------------------
25 Holding, Pamela Managing Director
- -------------------------------------------------------------------------------------
26 Hurley, William J. Managing Director Managing Director and CFO of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
27 Jacobs, Jerome J. Managing Director
- -------------------------------------------------------------------------------------
28 Joseph, Joseph P. Managing Director
- -------------------------------------------------------------------------------------
29 Kamshad, Omid Managing Director
- -------------------------------------------------------------------------------------
30 King, David L. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
31 Kohli, D. William Managing Director
- -------------------------------------------------------------------------------------
32 Kreisel, Anthony I. Managing Director
- -------------------------------------------------------------------------------------
33 Kuenstner, Deborah F. Managing Director
- -------------------------------------------------------------------------------------
34 Landes, William J. Managing Director
- -------------------------------------------------------------------------------------
35 Leibovitch, Richard G. Managing Director
- -------------------------------------------------------------------------------------
36 Leichter, Jennifer E. Managing Director
- -------------------------------------------------------------------------------------
37 Maloney, Kevin J. Managing Director
- -------------------------------------------------------------------------------------
38 Martino, Michael Managing Director Managing Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
39 Maxwell, Scott M. Managing Director
- -------------------------------------------------------------------------------------
40 McGue, William F. Managing Director
- -------------------------------------------------------------------------------------
41 McMullen, Carol C. Managing Director
- -------------------------------------------------------------------------------------
42 Mecmani, Krisha Managing Director
- -------------------------------------------------------------------------------------
43 Miller, Daniel L. Managing Director
- -------------------------------------------------------------------------------------
44 Morgan Jr., John J. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
45 Morgan, Kelly A. Managing Director
- -------------------------------------------------------------------------------------
46 Peacher, Stephen C. Managing Director
- -------------------------------------------------------------------------------------
47 Pollard, Mark D. Managing Director
- -------------------------------------------------------------------------------------
48 Porter, Charles E. Managing Director
- -------------------------------------------------------------------------------------
49 Price, Quintin I. Managing Director
- -------------------------------------------------------------------------------------
50 Reilly, Thomas V. Managing Director
- -------------------------------------------------------------------------------------
51 Schultz, Mitchell D. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
52 Scott, Justin M. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- -------------------------------------------------------------------------------------
53 Shadek Jr., Edward T. Managing Director
- -------------------------------------------------------------------------------------
54 Starr, Loren Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
55 Swift, Robert Managing Director
- -------------------------------------------------------------------------------------
56 Talanian, John C. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
57 Tibbetts, Richard B. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
58 Waldman, David L. Managing Director
- -------------------------------------------------------------------------------------
59 Wetlaufer, Eric Managing Director
- -------------------------------------------------------------------------------------
60 Woolverton, William H. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- -------------------------------------------------------------------------------------
61 Arends, Michael K. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
62 Asher, Steven E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
and Senior Vice President
of Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
63 Atkin, Michael J. Senior Vice President
- -------------------------------------------------------------------------------------
64 Augustine, Jeffrey B. Senior Vice President
- -------------------------------------------------------------------------------------
65 Bakshi, Manjit S. Senior Vice President
- -------------------------------------------------------------------------------------
66 Bamford, Dolores Snyder Senior Vice President
- -------------------------------------------------------------------------------------
67 Baumbach, Robert K. Senior Vice President
- -------------------------------------------------------------------------------------
68 Berka, Sharon A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
69 Block, Richard L. Senior Vice President
- -------------------------------------------------------------------------------------
70 Boselli, John A. Senior Vice President
- -------------------------------------------------------------------------------------
71 Bousa, Edward P. Senior Vice President
- -------------------------------------------------------------------------------------
72 Burke, Andrea Senior Vice President
- -------------------------------------------------------------------------------------
73 Burns, Cheryl A. Senior Vice President
- -------------------------------------------------------------------------------------
74 Byrne, Joshua L. Senior Vice President
- -------------------------------------------------------------------------------------
75 Callahan, Ellen S. Senior Vice President
- -------------------------------------------------------------------------------------
76 Carlson, David G. Senior Vice President
- -------------------------------------------------------------------------------------
77 Chang, Jack P. Senior Vice President
- -------------------------------------------------------------------------------------
78 Chrostowski, Louis F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
79 Curran, Peter J. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
80 Dalferro, John R. Senior Vice President
- -------------------------------------------------------------------------------------
81 Derbyshire, Ralph C. Senior Vice President
- -------------------------------------------------------------------------------------
82 Eigerman, Nathan W. Senior Vice President
- -------------------------------------------------------------------------------------
83 England, Richard B. Senior Vice President
- -------------------------------------------------------------------------------------
84 Epke Laura L. Senior Vice President
- -------------------------------------------------------------------------------------
85 Finch, Edward R. Senior Vice President
- -------------------------------------------------------------------------------------
86 Flaherty, Patricia C. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
87 Fontana, Forrest N. Senior Vice President
- -------------------------------------------------------------------------------------
89 Francis, Jonathan H. Senior Vice President
- -------------------------------------------------------------------------------------
89 Frost, Karen T. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
90 Frucci, Richard M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
91 Gorman, Stephen A. Senior Vice President
- -------------------------------------------------------------------------------------
92 Grant, Peter J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
93 Graviere, Patrice Senior Vice President
- -------------------------------------------------------------------------------------
94 Grim, Daniel J. Senior Vice President
- -------------------------------------------------------------------------------------
95 Haagensen, Paul E. Senior Vice President
- -------------------------------------------------------------------------------------
96 Hadden, Peter J. Senior Vice President
- -------------------------------------------------------------------------------------
97 Halperin, Matthew C. Senior Vice President
- -------------------------------------------------------------------------------------
98 Hart, Nigel P. Senior Vice President
- -------------------------------------------------------------------------------------
99 Healey, Deborah R. Senior Vice President
- -------------------------------------------------------------------------------------
100 Hotchkiss, Michael F. Senior Vice President
- -------------------------------------------------------------------------------------
101 Kaufman, Jeffrey Senior Vice President
- -------------------------------------------------------------------------------------
102 Kay, Karen R. Senior Vice President Clerk, Director and Senior
Vice President of Putnam
Fiduciary Trust Company
and Senior Vice President
of Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
103 Kirson, Steven L. Senior Vice President
- -------------------------------------------------------------------------------------
104 Knight, Jeffrey L. Senior Vice President
- -------------------------------------------------------------------------------------
105 Koontz, Jill A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
106 Korn, Karen R. Senior Vice President
- -------------------------------------------------------------------------------------
107 Kurey, Thomas J. Senior Vice President
- -------------------------------------------------------------------------------------
108 Lannum III, Coleman N. Senior Vice President
- -------------------------------------------------------------------------------------
109 Lindsey, Jeffrey R. Senior Vice President
- -------------------------------------------------------------------------------------
110 Lode, Geirulv Senior Vice President
- -------------------------------------------------------------------------------------
111 Lomba, Rufino R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
112 MacElwee, Jones, Senior Vice President
Elizabeth M.
- -------------------------------------------------------------------------------------
113 Madore, Robert A. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
114 Malloy, Julie M. Senior Vice President
- -------------------------------------------------------------------------------------
115 Manuel Jr., Senior Vice President
Richard D.
- -------------------------------------------------------------------------------------
116 Marrkand, Paul E. Senior Vice President
- -------------------------------------------------------------------------------------
117 Marshall, William L. Senior Vice President
- -------------------------------------------------------------------------------------
118 Matteis, Andrew S. Senior Vice President
- -------------------------------------------------------------------------------------
119 McDonald, Richard E. Senior Vice President
- -------------------------------------------------------------------------------------
120 Meehan, Thalia Senior Vice President
- -------------------------------------------------------------------------------------
121 Mehta, Sandeep Senior Vice President
- -------------------------------------------------------------------------------------
122 Miller, William H. Senior Vice President
- -------------------------------------------------------------------------------------
123 Mockard, Jeanne L. Senior Vice President
- -------------------------------------------------------------------------------------
124 Mufson, Michael J. Senior Vice President
- -------------------------------------------------------------------------------------
125 Mullen, Donald E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
126 Mullin, Hugh H. Senior Vice President
- -------------------------------------------------------------------------------------
127 Netols, Jeffrey W. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
128 Oler, Stephen S. Senior Vice President
- -------------------------------------------------------------------------------------
129 Paine, Robert M. Senior Vice President
- -------------------------------------------------------------------------------------
130 Parker, Margery C. Senior Vice President
- -------------------------------------------------------------------------------------
131 Perry, William Senior Vice President
- -------------------------------------------------------------------------------------
132 Peters, Carmel Senior Vice President
- -------------------------------------------------------------------------------------
133 Petralia, Randolph S. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
134 Plapinger, Keith Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
135 Pohl, Charles G. Senior Vice President
- -------------------------------------------------------------------------------------
136 Ravera, David A. Senior Vice President
- -------------------------------------------------------------------------------------
137 Prusko, James M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
138 Quistberg, Paul T. Senior Vice President
- -------------------------------------------------------------------------------------
139 Ray, Christopher A. Senior Vice President
- -------------------------------------------------------------------------------------
140 Rogers, Kevin J. Senior Vice President
- -------------------------------------------------------------------------------------
141 Ruys de Perez, Senior Vice President Senior Vice President of
Charles A. Putnam Fiduciary Trust
Company and Senior Vice
President of Putnam Mutual
Funds Corp.
- -------------------------------------------------------------------------------------
142 Santos, David J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
143 Santosus, Anthony C. Senior Vice President
- -------------------------------------------------------------------------------------
144 Schwister, Jay E. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
145 Scordato, Senior Vice President Senior Vice President of
Christine A. Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
146 Sievert, Jean I. Senior Vice President
- -------------------------------------------------------------------------------------
147 Simon, Sheldon N. Senior Vice President
- -------------------------------------------------------------------------------------
148 Simozar, Saied Senior Vice President
- -------------------------------------------------------------------------------------
149 Smith Jr., Leo J. Senior Vice President
- -------------------------------------------------------------------------------------
150 Smith, Margaret D. Senior Vice President
- -------------------------------------------------------------------------------------
151 Spatz, Erin J. Senior Vice President
- -------------------------------------------------------------------------------------
152 Stack, Michael P. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
153 Stairs, George W. Senior Vice President
- -------------------------------------------------------------------------------------
154 Strumpf, Casey Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
155 Sugimoto, Toshifumi Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
156 Sullivan, Roger R. Senior Vice President
- -------------------------------------------------------------------------------------
157 Svensson, Lisa H. Senior Vice President
- -------------------------------------------------------------------------------------
158 Swanberg, Charles H. Senior Vice President
- -------------------------------------------------------------------------------------
159 Thomsen, Rosemary H. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -------------------------------------------------------------------------------------
160 Troped, Bonnie L. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
161 Verani, John R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
162 Walsh, Francis P. Senior Vice President
- -------------------------------------------------------------------------------------
163 Warren, Paul C. Senior Vice President
- -------------------------------------------------------------------------------------
164 Weinstein, Michael R. Senior Vice President
- -------------------------------------------------------------------------------------
165 Weiss, Manuel Senior Vice President
- -------------------------------------------------------------------------------------
166 Whalen, Edward F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -------------------------------------------------------------------------------------
167 Wheeler, Diane D.F. Senior Vice President
- -------------------------------------------------------------------------------------
168 Wyke, Richard P. Senior Vice President
- -------------------------------------------------------------------------------------
169 Yogg, Michael R. Senior Vice President
- -------------------------------------------------------------------------------------
170 Zukowski, Gerald S. Senior Vice President
- -------------------------------------------------------------------------------------
</TABLE>
(I) Summary of Business Lines and Business Operation
Investment Management Company is engaged in the business of providing
investment management and investment advisory services to mutual funds. As
of the end of October 1999, Investment Management Company managed, advised,
and/or administered the following 113 funds and fund portfolios (having an
aggregate net asset value of nearly $251 billion):
[see 3 Fund List] 1
2
3
4
5
6
7
8
9
10
11
(J) Miscellaneous
1. Election and Removal of Directors
Directors of Investment Management Company are elected to office or removed
from office by vote of either stockholders or directors, in accordance with
Articles of Organization and By-Laws of Investment Management Company.
2. Results of Operations
Officers are elected by the Board of Directors. The Board of Directors may
remove any officer without cause.
3. Supervision by SEC of Changes in Directors and Certain Officers
Investment Management Company files certain reports with the SEC in accordance
with Sections 203 and 204 of the Investment Advisers Act of 1940, which reports
list and provide certain information relating to directors and officers of
Investment Management Company.
Under Section 9 (b) of the Investment Company Act of 1940 the SEC may prohibit
the directors and officers from remaining in office, if the SEC judges that
such directors and officers have willfully violated any provision of the
federal securities law.
4. Amendment to the Articles of Organization, Transfer of Business and
Other Important Matters.
a. Articles of Organization of Investment Management Company may be
amended, under the General Corporation Law of The Commonwealth of
Massachusetts, by appropriate shareholders' vote.
b. Under the General Corporation Law of The Commonwealth of Massachusetts,
transfer of business requires a vote of 2/3 of the stockholders entitled to
vote thereon.
c. Investment Management Company has no direct subsidiaries.
5. Litigation, etc.
There are no known facts, such as legal proceedings, which are expected to
materially affect the Fund and/or Investment Management Company within the
six-month period preceding the filing of this Registration Statement.
III. OUTLINE OF THE OTHER RELATED COMPANIES
(A) Putnam Fiduciary Trust Company (the Transfer Agent, Shareholder Service
Agent and Custodian)
(1) Amount of Capital
U.S.$77,624,721 (approximately \8,150,595,705) as of the end of October
1999
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts trust company and is a
wholly-owned subsidiary of Putnam Investments, Inc., parent of Putnam
Investment Management Company. Putnam Fiduciary Trust Company has been
providing paying agent and shareholder service agent services to mutual
funds, including the Fund, since its inception and custody services since
1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer agent services,
shareholder services and custody services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$317,078,565 (approximately \33,293,249,325) as of the end of October
1999
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal Underwriter of the shares of
Putnam Funds including the Fund.
(3) Outline of Business Relationship with the Fund
Putnam Mutual Funds Corp. engages in providing marketing services to the
Fund.
(C) Yamatane Securities Co., Ltd. (Distributor in Japan and Agent Company)
(1) Amount of Capital
[YEN] 14,760,035,531 billion as of the end of October 1999
(2) Description of Business
Yamatane Securities Co., Ltd. is a diversified securities company in Japan.
Also, it engages the fund units for the investment trust funds of Asahi
Investment Trust Management Co., Ltd., Sakura Investment Trust Management
Co., Ltd., Nissei Investment Trust Management Co., Ltd., NCG Investment
Trust Management Co., Ltd. and Nomura Investment Trust Management Co.,
Ltd., and acts as the Agent Company and engages in handling the sales and
repurchase for Fidelity Funds International Fund.
Yamatane Securities Co., Ltd. will be merged with Shinnei-Ishino Securities
Co., Ltd. as of January 1, 2000 and the new company will be named
Sakura-Friend Securities Co., Ltd.
(3) The Company acts as a Distributor in Japan and Agent Company for the
Fund in connection with the offering of shares in Japan.
(D) Capital Relationships
100% of the shares of Putnam Investment Management Company are held by
Putnam Investments, Inc.
(E) Interlocking Directors and Officers
<TABLE>
<CAPTION>
Names and functions of officers of the Fund who also are officers of the
related companies are as follows:
(as of the filing date)
- --------------------------------------------------------------------------------------
Name of Investment Transfer Agent and
Officer or Management Shareholder Service
Trustee Fund Company Agent
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Putnam Chairman and Chairman and None
Trustee Director
- --------------------------------------------------------------------------------------
Charles E. Porter Executive Vice Managing Director None
President
- --------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice Senior Vice None
President President
- --------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and President and None
Vice President CEO
- --------------------------------------------------------------------------------------
Gordon H. Silver Vice President Senior Managing Director
Director
- --------------------------------------------------------------------------------------
John R. Verani Vice President Senior Vice None
President
- --------------------------------------------------------------------------------------
Ian C. Ferguson Vice President Senior Managing None
Director
- --------------------------------------------------------------------------------------
Brett C. Browchuk Vice President Managing Director None
- --------------------------------------------------------------------------------------
John J. Morgan, Jr. Vice President Managing Director None
- --------------------------------------------------------------------------------------
Justin M. Scott Vice President Managing Director None
- --------------------------------------------------------------------------------------
Omid Kamshad Vice President Managing Director None
- --------------------------------------------------------------------------------------
Mark D. Pollard Vice President Senior Vice None
President
- --------------------------------------------------------------------------------------
Nigel P. Hart Vice President Senior Vice None
President
- --------------------------------------------------------------------------------------
Nicholas Melhuish Vice President Vice President None
- --------------------------------------------------------------------------------------
</TABLE>
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Financial highlights
The financial highlights table is intended to help investors understand the
Fund's recent financial performance. Certain information reflects financial
results for a single fund share. The total returns represent the rate that an
investor would have earned or lost on an investment in the Fund, assuming
reinvestment of all dividends and distributions. This information has been
derived from the Fund's Financial Statements, which have been audited by
PricewaterhouseCoopers LLP. Its report and the Fund's financial statements
are included in the Fund's U.S. annual report to shareholders, which is
available upon request.
Class M
(For a share outstanding throughout the period)
Year ended June 30
----------------------------------------------------
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $23.51 $18.85 $15.86 $13.90
- ----------------------------------------------------------------------------------
Investment operations
Net investment income .02(c) .20 (c) .19 (c) .24 (c)
- ----------------------------------------------------------------------------------
Net realized and
unrealized gain /(loss)
on investments (.85) 5.89 4.03 2.12
- ----------------------------------------------------------------------------------
Total from investment
operations (.83) 6.09 4.22 2.36
- ----------------------------------------------------------------------------------
Less distributions:
From net investment income (.20) (.30) (.17) --
- ----------------------------------------------------------------------------------
From net realized gain on
investments (.88) (1.13) (1.06) (.40)
- ----------------------------------------------------------------------------------
In excess of net realized gain
on investments (.12)
- ----------------------------------------------------------------------------------
Total distributions (1.20) (1.43) (1.23) (.40)
- ----------------------------------------------------------------------------------
Net asset value,
end of period $21.48 $23.51 $18.85 $15.86
- ----------------------------------------------------------------------------------
Ratios and supplemental
data
Total investment return
at net asset value (%)(a) (3.37) 34.56 27.91 17.28
Net assets, end of period
(in thousands) $97,950 $42,614 $15,811 $4.047
- ----------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.73 1.82 1.95 2.02
- ----------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (%) .07 .99 1.10 1.59
Portfolio turnover rate (%) 65.08 48.86 55.45 38.85
- ----------------------------------------------------------------------------------
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect
of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30,
1996 and thereafter, includes amounts paid through expense offset and
brokerage service arrangements. Prior period ratios exclude these amounts.
(c) Per share net investment income (loss) has been determined on the basis
of the weighted average number of shares outstanding during the period.
</TABLE>
The following financial documents are omitted here.
Report of independent accountants for the fiscal year ended June 30, 1999
Report of independent accountants for the year ended June 30, 1998
Statement of assets and liabilities June 30, 1999
Statement of operations Year ended June 30, 1999
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements June 30, 1999
Portfolio of investments owned June 30, 1999
Statement of assets and liabilities June 30, 1998
Statement of operations Year ended June 30, 1998
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements June 30, 1998
2. CONDITION OF THE FUND
<TABLE>
<CAPTION>
(a) Statement of Net Assets
(As of the end of October 1999)
- -----------------------------------------------------------------------------------
USD JPY
- -----------------------------------------------------------------------------------
(in thousands)
- -----------------------------------------------------------------------------------
<S> <C> <C>
a. Total Assets 1,871,365,315 196,493,358
- -----------------------------------------------------------------------------------
b. Total Liabilities 101,261,854 10,632,495
- -----------------------------------------------------------------------------------
c. Total Net Assets 1,770,103,461 185,860,863
- -----------------------------------------------------------------------------------
(a-b)
- -----------------------------------------------------------------------------------
d. Total Number of Shares Class A. 39,056,151 Shares
- -----------------------------------------------------------------------------------
Outstanding Class B. 35,484,792 Shares
- -----------------------------------------------------------------------------------
Class C. 2,972,775 Shares
- -----------------------------------------------------------------------------------
Class M. 3,978,848 Shares
- -----------------------------------------------------------------------------------
e. Net Asset Value Class A. 22.82 \2,396.10
- -----------------------------------------------------------------------------------
per Share (c/d) Class B. 22.16 \2,326.80
- -----------------------------------------------------------------------------------
Class C. 22.78 \2,391.90
- -----------------------------------------------------------------------------------
Class M. 22.54 \2,366.70
- -----------------------------------------------------------------------------------
</TABLE>
Top 30 - 1
Top 30 - 2
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
Japanese translation of the financial statements is attached to the
Japanese version.
VI. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT TRUST SECURITIES
1. Transfer of the Shares
The transfer agent for the registered share certificates is Putnam Fiduciary
Trust Company, P.O. Box 41203, Providence, RI 02940-1203, U. S. A.
The Japanese investors who entrust the custody of their shares to the
Distributor or a Sales Handling Company shall have their shares transferred
under the responsibility of such company, and the other investors shall make
their own arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special shareholders'
meetings may be held from time to time as required by the Agreement
and Declaration of Trust and the Investment Company Act of 1940.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be restricted.
VI. REFERENCE INFORMATION
The following documents in relation to the Fund were filed with the
Director of Kanto Local Finance Bureau.
July 1, 1998: Amendment to Securities Registration Statement
December 18, 1998: Securities Registration Statement
December 22, 1998: Amendment to Securities Registration Statement
December 25, 1998: Amendment to Securities Registration Statement
March 31, 1999: Semi-annual Report (during the fifth term)
Amendment to Securities Registration Statement
June 18, 1999: Securities Registration Statement
June 21, 1999: Amendment to Securities Registration Statement
June 25, 1999: Amendment to Securities Registration Statement
[Translation]
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM EUROPE GROWTH FUND
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: December 17, 1999
Name of the Registrant Trust: PUTNAM EUROPE GROWTH FUND
Name of Trustees: George Putnam
John A. Hill
William F. Pounds
Jameson A. 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
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
-------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
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(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
-ii-
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM EUROPE GROWTH FUND
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 50 million Class M shares.
Foreign Investment Fund Securities Up to the total amount obtained
to be Publicly Offered or Sold: by aggregating the net asset
value per Class M share in
respect of 50 million Class M
shares (The maximum amount
expected to be sold is 1,102.5
million U.S. dollars ( [YEN]
115.7625 billion.)
Note 1: U.S. $amount is translated into Japanese Yen at the rate of U.S.$l.00=
[YEN] 105.00, the mean of the exchange rate quotations by The Bank of
Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by telegraphic
transfer against yen on October 29, 1999.
Note 2: The maximum amount expected to be sold is an amount calculated by
multiplying the net asset value per Class M share as of April 30, 1999
(U.S.$22.05) by 50 million Class M shares for convenience.
Places where a copy of this Amendment to Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Amendment to Securities Registration
Statement is 5.)
I. REASON FOR FILING THIS AMENDMENT TO SECURITIES REGISTRATION STATEMENT:
This statement purports to amend and update the relevant information of the
Securities Registration Statement ("Original SRS") filed on June 15, 1999
due to the fact that the aforementioned Annual Securities Report was filed
today.
The exchange rates used in this statement to translate the amended amounts
of foreign currencies are different from those used before these
amendments, as the latest exchange rates are used in this statement.
II. CONTENTS OF THE AMENDMENTS (the page numbers refer to in the Original
SRS)
Part II. INFORMATION CONCERNING ISSUER (page 5 of the Original SRS)
The following matters in the Original SRS are amended to have the same
contents as those provided in the following items of the aforementioned
Annual Securities Report:
Before amendment After amendment
[Original SRS] [Aforementioned Annual Securities Report]
I. DESCRIPTION OF THE FUND I. DESCRIPTION OF THE FUND (the
aforementioned Japanese Annual
Securities Report)
II. OUTLINE OF THE FUND II. OUTLINE OF THE FUND (Ditto)
III. OUTLINE OF THE OTHER III. OUTLINE OF THE OTHER RELATED
RELATED COMPANIES COMPANIES (Ditto)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF
THE FUND THE FUND (Ditto)
V. SUMMARY OF INFORMATION VI. SUMMARY OF INFORMATION
CONCERNING FOREIGN CONCERNING FOREIGN
INVESTMENT FUND SECURITIES INVESTMENT FUND SECURITIES
(Ditt)
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.$l.00=
[YEN] 105.00, the mean of the exchange rate quotations by The Bank of
Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by telegraphic
transfer against yen on October 29, 1999.
Note 2: In this report, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount for the "total" column is not
equal to the aggregate amount. Also, conversion into other currencies is done
simply by multiplying the corresponding amount by the conversion rate specified
and rounded up when necessary. As a result, in this report, there are cases in
which figures for the same information differ from each other.
Note 3: In this report, "fiscal year" refers to a year from July 1 to June 30
of the following year.
VI. MISCELLANEOUS
(1) The following documents in relation to the Fund were filed with the
Director of Kanto Local Finance Bureau.
July 1, 1998: Amendment to Securities Registration Statement
December 18, 1998: Securities Registration Statement
December 22, 1998: Amendment to Securities Registration Statement
December 25, 1998: Amendment to Securities Registration Statement
March 31, 1999: Semi-annual Report (during the fifth term)
Amendment to Securities Registration Statement
June 18, 1999: Securities Registration Statement
June 21, 1999: Amendment to Securities Registration Statement
June 25, 1999: Amendment to Securities Registration Statement
(2) The ornamental design is used in cover page of the Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the beginning of the
Prospectus, summarizing the content of Part I., Information on the
securities, "I. Descriptions of the Fund", "III. Outline of Other Related
Companies" and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
Attached document (Summarized Preliminary Prospectus) will be used pursuant
to the below, as the document (Summarized Preliminary Prospectus) as set
forth at Item 1.(1)(b), of Article 12 of the Ordinance Concerning the
Disclosure of the Content, etc. of the Specified Securities.
(a) The content of the summarized Preliminary Prospectus may be publicized
by leaflets, pamphlets, direct mails (post cards and mails in envelopes) or
at newspapers, magazines, Internet and other books.
(b) The layout, quality of papers, printing color, design etc. of the
Summarized Preliminary Prospectus may vary depending on manner of usage.
Photos and illustrations set forth in the attached may be used.
(c) For information of the Fund's achievements, the changes of the net
asset value per share and the fluctuation rates since the establishment of
the Fund or for the latest 3 months, 6 months, one year, two years, three
years or five years may be set out in the figures or graphs. Such
information regarding the Fund's achievement may be converted into and
presented in yen.
(d) For information of the status of the Fund, diversification of
investment portfolio on type of assets and/or the name of country may be
set out in the figures or graphs. As to such information the latest
information which is available from time to time after the filing of the
Securities Registration Statement may be set out.
Part III. SPECIAL INFORMATION
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
Original SRS is amended to have the same contents as those provided in V.
FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
aforementioned Annual Securities Report:
