(logo)
Putnam
New
Opportunities
Fund
Semiannual
Report
December 31, 1993
(artwork)
For investors seeking
long-term capital
appreciation primarily
through common stock
investments in
companies in
economic sectors with
above-average long-term
growth potential
A member
of the Putnam
Family of Funds
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
7 Portfolio of investments owned
11 Financial statements
19 Fund performance supplement
<PAGE>
How your
fund performed
For periods ended December 31, 1993
Total return* Fund Lipper
Class A Class B Growth
NAV POP NAV CDSC Fund Index
6 months 20.59% 13.66% 20.14% 15.14% 7.13%
1 year 32.69 25.09 14.18
Life-of-class+
(class A shares)209.29 191.54 -- -- 69.50
annualized 40.22 37.76 -- -- 17.12
(class B shares) -- -- 40.70 35.70 13.33
Share data Class A Class B
NAV POP NAV
June 30, 1993 $20.83 $22.10 $20.80
December 31, 1993 $24.66 $26.16 $24.53
Distributions
6 months ended Investment Short-termLong-term
December 31, 1993 Number income capital gainscapital gains Total
Class A shares 1 -- $0.047 $0.400 $0.447
Class B shares 1 -- $0.047 $0.400 $0.447
*Performance data represent past results. Investment return and
net asset value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
+The fund began operations August 31, 1990, offering shares now
known as class A shares. Effective March 1, 1993, the fund began
offering class B shares. Performance for each share class will
differ.
<PAGE>
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions. It may be shown at net asset value or public
offering price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any sales charge.
Public offering price (POP) is the price of a mutual fund share
plus the maximum sales charge levied at the time of purchase.
Contingent deferred sales charge (CDSC) is a charge applied at
the time of the redemption of shares rather than the time of
purchase. It generally declines and eventually disappears over a
stated period.
Class A shares are the shares of your fund offered subject to an
initial sales charge. Your fund's POP includes the maximum 5.75%
sales charge.
Class B shares are the shares of your fund offered with no
initial sales charge. Within the first six years of purchase,
they are subject to a CDSC declining from 5% to 1%. After the
sixth year, the CDSC no longer applies.
Please see the fund performance supplement on page 19 for
additional information about performance comparisons.
<PAGE>
From the
Chairman
(photograph of George Putnam)
(c) Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
Putnam New Opportunities Fund is off to a very strong start for
fiscal 1994, adding to its successful track record and garnering
praise from numerous industry sources along the way. During the
semiannual period ended December 31, 1993, the fund posted
returns of over 20% at net asset value for both class A and class
B shares. According to Lipper Analytical Services, an independent
research firm, the fund's total returns place it among the top 1%
of funds with similar objectives for every time period tracked
during the life of the fund. The competition for this honor
ranges from 265 funds tracked for the three years ended December
31, 1993, to 395 funds tracked year-to-date.
As they have done since the fund's start of operations in 1990,
Portfolio Manager Dan Miller and his team of analysts achieved
these results by first targeting market sectors that Putnam
Management believes hold the greatest growth potential, given the
current economic, investment and political environment. Then,
they work to identify promising companies within each sector. In
the Report from Putnam Management that follows, Dan explains the
key trends within each sector during the period, as well as the
strategies he employed to capitalize on those trends.
While the fund's focus on emerging companies in fast-growing
sectors of the economy can lead to significant short-term price
fluctuations, we believe that the potential for superior total
returns over time amply rewards those investors willing to accept
this risk. As the fund enters the second half of fiscal 1994, we
expect its unique strategy, combined with the strength and depth
of Putnam's equity research, to lead to continued success.
Respectfully yours,
George Putnam
February 16, 1994
<PAGE>
Report from
Putnam Management
Top 10 holdings (12/31/93)*
Hospitality Franchise
Systems, Inc.
Liberty Media Corp. Class A
Wellfleet Communications,
Inc.
Cisco Systems, Inc.
Robert Half International, Inc.
DF&R Restaurants, Inc.
Elan Corp., PLC ADS
Clinicom, Inc.
ALC Communicators Corp.
Zoll Medical Corp.
*Reflects 15.9% of the total portfolio, based on net assets.
Putnam New Opportunities Fund invests in promising, quality
companies within selected market sectors where we believe the
greatest growth potential exists. This strategy has led to
enviable returns, both within the recently ended semiannual
period and the past twelve months, as well as over the life of
the fund. Although past performance is no guarantee of future
results, notable third-party recognition during the year included
many well-known mutual fund rating agencies and investment
industry publications:
The fund's six-month total returns of 20.59% for class A shares
and 20.14% for class B shares, both at net asset value, nearly
doubled the 10.48% return of the NASDAQ Industrials Index, an
unmanaged measure of over-the-counter stocks. In addition, the
fund's returns more than quadrupled the 4.95% earned by the
broader-based Standard and Poor's 500 Index(trade mark).
Morningstar has awarded the fund five stars -- the highest rating
available -- for every two-week period from the fund's initial
rating on October 1, 1993, through January 21, 1994. The ratings
are based on risk-adjusted 3-year total returns and include the
effects of sales charges.
The January issues of Money and Your Money magazines both
included the fund in their listings of the top 10 stock funds
based on 1- and 3-year total returns, not including sales
charges.
New sector introduced The dynamics of today's economic,
demographic and political climates have led us to identify a
seventh investment sector that we believe is poised for
above-average growth -- personal financial services. Representing
4.2% of the portfolio at the end of the period, this sector is
likely to benefit from the baby boomer generation reaching its
peak income and savings years. Dissatisfaction with the low
interest rates offered by traditional bank products, coupled with
the growing realization that employee-sponsored retirement plans
alone will not support a healthy retirement, have turned millions
of savers into investors, further fueling growth in this sector.
Because companies in this sector -- exemplified by life
insurance, supplemental health insurance and mutual fund
companies -- tend to be more conservative and experience slower
growth than those in our other targeted sectors, the personal
financial services sector is expected to play a relatively small
role in the fund's portfolio. We expect its primary benefit to be
additional diversification.
Investment sector recap Shifts in sector allocations have not
been drastic over the past six months, with the largest changes
in emphasis coming in the applied/advanced technology and the
medical technology/cost containment areas.
As the health care debate wears on, medical technology/cost
containment has remained one of the portfolio's largest sectors.
New purchases boosted this sleeve from 18.0% to 21.6% of the
portfolio during the period to become the fund's largest area of
concentration. The sector's holdings represent companies we have
identified as likely beneficiaries of health care reform. We were
able to purchase these stocks at attractive prices because, in
our opinion, the majority of investors have not reached the same
level of understanding on the potential outcome of reform.
The size of our media/entertainment allocation was virtually
unchanged during the period, although we have sold some holdings.
Having identified the growth potential of this sector more than
three years ago, we were able to realize profits here as the rest
of the market recently "discovered" it. Now that acquisitions
among leading companies in this sector have brought on increased
investor attention, the potential for further significant price
appreciation may have diminished. For this reason, we are not
actively seeking new investments in this sector.
Introduced as one of the fund's sectors in fiscal 1993,
value-oriented consuming has quickly become one of the
portfolio's largest sectors. We believe that companies in this
area -- including discount retailers, budget motels and casual
theme restaurant chains -- appeal to the budget-conscious
consumer of the '90s. We believe that discount-oriented concepts,
having grown in popularity during the recent recession, will
continue to attract consumers in the current climate of modest
economic recovery.
Despite positive growth in the economy, competition has increased
within several industry sectors, including applied/advanced
technology. We reduced portfolio holdings in this area,
de-emphasizing companies such as developers of personal computing
education and entertainment software, who are suffering from
growing competition in the field, as well as companies who are
not expected to profit from the sector's advances to next
generation platforms.
Among the fund's smaller sectors, holdings in personal
communications companies remain focused on cellular
communications, long distance, paging and local telephone bypass
companies. Despite the strong demand one would expect for
environmental services, no market leaders have really emerged and
product differentiation remains slight. Because market leadership
is one of the qualities we seek in selecting stocks, this remains
the portfolio's smallest sector. Stocks which are likely to
benefit from strong secular growth trends, but do not fit neatly
into any of the fund's designated investment sectors, are well
represented among the fund's miscellaneous holdings.
Looking ahead Slow growth in the economy, accompanied by
still-low interest rates and an absence of inflationary
pressures, bodes well for the fund. Stocks ended calendar 1993 at
generally fair values based on 1993 earnings and, despite
concerns over historically high valuations, we believe rethinking
these values based on 1994 and 1995 earnings estimates indicates
room for continued appreciation.
(line graph)
Cumulative return on a
$10,000 investment since 8/31/90
Putnam New Opportunities Fund
...............Class A shares at NAV
***************Class A shares at POP
- ---------------Lipper Growth Fund Index
+++++++++++++++NASDAQ Industrials Index
date NAV POP Lipper NASDAQ
8/31/90 10000 9425 10000 10000
12/31/90 11077 10441 10211 9978
12/31/91 18557 17492 13900 16439
12/31/92 23309 21971 14844 17815
12/31/93 30929 29154 16950 19803
Past performance is no assurance of future results. Performance
of class B shares will vary from performance of class A shares
due to differences in sales charges and 12b-1 fees. For example,
$10,000 invested on 3/1/93 subject to the applicable contingent
deferred sales charge would have been worth $13,570 if redeemed
12/31/93. If invested 6/30/93, and redeemed 12/31/93, it would
have been worth $11,514.
<PAGE>
(bar chart)
Shifts in sector allocations (based on a percentage of net
assets)
****** Current year
...... Prior year
Medical technology/
cost containment ......................18.0%
*************************21.6%
Media/entertainment ........................21.0%
**********************20.5%
Value-oriented consuming ......................18.2%
***********************19.8%
Applied/advanced technology .........................21.3%
*************13.4%
Personal communications ......8.2%
*****7.8%
Personal financial services .0.0%
****4.2%
Miscellaneous ...3.0%
**2.3%
Environmental services .0.6%
*0.6%
<PAGE>
Portfolio of
investments owned
December 31, 1993 (Unaudited)
Common Stocks (90.2%)(a)
Number of Shares Value
Health Care Services (11.8%)
475,000 Careline, Inc. $ 4,393,750
165,000 Coventry Corp.(b) 7,012,500
195,000 Health Management Assoc.,
Inc.(b) 5,703,750
85,000 Healthsource, Inc.(b) 4,696,250
366,400 Homecare Management, Inc. 4,992,200
255,000 Homedco Group, Inc.(b) 7,841,250
350,000 Horizon Healthcare Corp.(b) 7,043,750
310,000 Lincare Holdings, Inc.(b) 7,711,250
210,000 Mariner Health Group, Inc.(b) 4,541,250
45,000 Oxford Health Plans, Inc.(b) 2,385,000
57,500 Pacificare Health Systems, Inc.(b) 2,149,063
162,000 Physician Corp. of America(b) 4,050,000
72,500 Quantum Health Resources, Inc. 2,120,625
175,900 Renal Treatment Centers, Inc.(b) 3,605,950
30,000 United Healthcare Corp. 2,276,250
150,000 Value Health, Inc.(b) 4,725,000
140,000 Vencor Inc.(b) 4,182,500
79,430,338
Computer Software (8.2%)
185,000 Cisco Systems, Inc.(b) 11,955,625
25,434 Concord Communications Inc. 12,717
195,000 Digidesign, Inc.(b) 2,340,000
45,000 FTP Software, Inc. 1,192,500
30,193 Intuit, Inc.(b) 1,286,977
110,000 Parametric Technology Corp.(b) 4,262,500
205,000 PeopleSoft, Inc.(b) 6,406,250
170,000 Sybase, Inc.(b) 7,140,000
140,000 Synopsys, Inc.(b) 6,335,000
50,500 Wall Data, Inc.(b) 2,026,313
190,000 Wellfleet Communications, Inc.(b) 12,255,000
55,212,882
Restaurants (7.5%)
217,500 Apple South, Inc. 4,567,500
235,300 Applebee's International, Inc. 7,882,550
5,400 Boston Chicken, Inc.(b) 194,400
240,000 Buffets Inc.(b) 6,180,000
325,000 DF&R Restaurants, Inc.(b) 9,465,625
125,000 Fresh Choice, Inc.(b) 3,406,250
240,000 Landrys Seafood Restaurants,
Inc.(b) 5,760,000
200,000 Outback Steakhouse, Inc.(b) 7,675,000
37,800 Sonic, Inc.(b) 973,350
250,000 Taco Cabana, Inc.(b) 4,437,500
50,542,175
Cable Television (7.4%)
60,000 Cablevision Systems Corp.(b) 4,095,000
386,821 Century Communications Corp.
Class A 4,448,442
133,500 Comcast Corp. Special Class A 4,806,000
150,000 Gaylord Entertainment Co. 4,218,750
165,300 International Family Entertain-
ment, Inc.(b) 3,367,988
490,000 Liberty Media Corp. Class A(b) 14,271,250
155,000 TCA Cable TV, Inc. 4,417,500
165,000 Tele-Communications, Inc.
Class A(b) 4,991,250
115,000 Viacom, Inc. Class B(b) 5,160,625
49,776,805
Retail (7.3%)
90,000 Autozone Inc.(b) 5,152,500
230,000 Bed Bath & Beyond, Inc.(b) 7,935,000
303,200 Books-A-Million, Inc.(b) 6,594,600
125,000 CUC International, Inc.(b) 4,500,000
100,000 Gymboree Corp.(b) 4,450,000
80,000 Home Depot, Inc. (The) 3,160,000
70,000 Kohl's Corp.(b) 3,517,500
60,000 Office Depot, Inc.(b) 2,017,500
240,000 Stein Mart, Inc.(b) 4,620,000
195,000 Sun Television & Appliances, Inc. 4,143,750
170,000 Today's Man, Inc.(b) 3,102,500
49,193,350
Broadcasting (5.3%)
150,000 Broadcasting Partners, Inc.(b) 2,362,500
140,000 Clear Channel Communications,
Inc.(b) 6,440,000
225,000 EZ Communications, Inc. Class A 3,543,750
165,000 Infinity Broadcasting Corp.
Class A(b) 4,991,250
75,000 QVC Network, Inc.(b) 2,943,750
360,000 Sfx Broadcasting, Inc. Class A(b) 4,590,000
420,000 Westcott Communications, Inc.(b) 7,665,000
380,000 Westwood One, Inc.(b) 3,182,500
35,718,750
Recreation (4.9%)
264,000 Boomtown, Inc.(b) 3,828,000
185,000 Casino America, Inc.(b) 4,440,000
75,000 Disney (Walt) Productions, Inc. 3,196,875
200,000 Elsinore Corp.(b) 925,000
335,000 Mirage Resorts, Inc.(b) 7,998,125
120,000 Players International Inc.(b) 2,970,000
172,800 President Riverboat Casinos, Inc.(b) 3,801,600
127,500 Promus Cos., Inc.(b) 5,833,125
32,992,725
Telephone Services (4.7%)
300,000 ALC Communications Corp.(b) 8,625,000
135 Bell South Corp. 7,813
301,800 Communications Central, Inc.(b) 3,998,850
250,000 Davel Communications Group,
Inc.(b) 3,843,750
65,000 LDDS Communications, Inc.(b) 3,136,250
146,600 MFS Communications Company,
Inc.(b) 4,764,500
140,000 Telephone & Data Systems, Inc. 7,297,500
31,673,663
Medical Equipment And Supplies (4.1%)
375,000 Bioject Medical Technologies(b) 1,875,000
200,000 Haemonetics Corp.(b) 5,550,000
51,800 Molecular Dynamics, Inc.(b) 608,650
190,000 Protocol Systems, Inc.(b) 2,042,500
160,000 Sofamor/Danek Group, Inc.(b) 5,320,000
105,000 Ventritex, Inc.(b) 4,121,250
270,000 Zoll Medical Corp.(b) 8,100,000
27,617,400
Computer Services (4.0%)
100,000 America Online, Inc.(b) 5,850,000
64,125 BISYS Group, Inc.(b) 1,106,156
181,100 Cambridge Technololgy Partners(b) 2,852,325
135,000 First Data Corp. 5,501,250
300,000 Fiserv Inc.(b) 5,775,000
125,000 Paychex, Inc. 4,375,000
65,000 Quickresponse Services, Inc.(b) 1,430,000
26,889,731
Pharmaceuticals and Biotechnology (3.7%)
145,000 Amylin Pharmaceuticals, Inc.(b) 1,885,000
45,000 Biogen Inc.(b) 1,794,375
115,000 Cephalon, Inc.(b) 1,883,125
160,000 Cor Therapeutics, Inc.(b) 2,420,000
209,500 Elan Corp., PLC ADR(b)(d) 8,877,564
125,000 Immulogic Pharmaceutical Corp.(b) 1,687,500
175,000 Magainin Pharmaceuticals, Inc.(b) 2,406,250
115,000 Penederm, Inc.(b) 1,265,000
190,000 Theratech, Inc. Delaware(b) 2,850,000
25,068,814
Insurance (3.4%)
215,000 Bankers Life Holding Corp. 4,622,500
145,000 CCP Insurance, Inc. 4,041,875
220,000 Equitable Cos., Inc. 5,940,000
135,000 NWNL Companies, Inc. 4,320,000
100,000 Sunamerica, Inc. 4,325,000
23,249,375
Business Services (3.0%)
185,000 Danka Business Systems ADR(c) 7,400,000
16,200 Kelly Services, Inc. Class A 449,550
80,200 Olsten Corp. (The) 2,355,875
385,000 Robert Half International, Inc.(b) 10,106,250
20,311,675
Cellular Broadcasting (2.9%)
35,000 Cellular Communications, Inc.
Class A(b) 1,636,250
250,000 Centennial Cellular Corp. Class A(b) 6,062,500
60,000 McCaw Cellular Communications,
Inc.(b) 3,030,000
225,000 Pactel Corp.(b) 5,596,870
100,000 United States Cellular Corp.(b) 3,500,000
19,825,620
Lodging (2.3%)
290,000 Hospitality Franchise Systems,
Inc.(b) 15,406,250
12,800 ShoLodge, Inc.(b) 294,400
15,700,650
Health Care Information Services (2.0%)
400,000 Clinicom, Inc.(b) 8,700,000
100,000 HBO & Co. 4,600,000
64,200 Pharmaceutical Marketing
Services, Inc.(b) 946,950
14,246,950
Business Equipment and Services (2.0%)
235,000 Antec Corp.(b) 5,875,000
115,000 Newbridge Networks Corp.(b) 6,296,250
90,000 Star Sight Telecast, Inc.(b) 1,665,000
13,836,250
Publishing (1.6%)
190,000 Marvel Enterainment Group, Inc.(b) 5,177,500
110,000 News Corp. Ltd. ADR(c) 5,802,500
10,980,000
Paging (1.5%)
280,000 A+ Communications, Inc.(b) 3,640,000
220,000 Paging Network, Inc.(b) 6,710,000
10,350,000
Computers (0.9%)
34,000 Cabletron Systems, Inc.(b) 3,825,000
40,400 Chipcom Corp.(b) 2,040,200
5,865,200
Financial Services (0.8%)
160,000 MBNA Corp. 5,340,000
Environmental Control (0.6%)
200,000 Omega Environmental, Inc.(b) 2,050,000
120,000 Waste Management International
PLC ADR(b)(c) 2,100,000
4,150,000
Specialty Consumer Products (0.3%)
135,000 Valence Technology, Inc.(b) 2,058,750
Total Common Stocks
(cost $455,532,073) $610,031,103
Convertible Preferred Stocks (0.5%)(a) (cost $1,992,839)
Number of Shares Value
72,000 Cellular Communications, Inc.
$0.01, cv. pfd. $ 3,366,000
Convertible Bonds (0.5%)(a) (cost $2,145,330)
Principal Amount Value
$ 4,500,000 Office Depot Inc. sub. liquid
yield, cv. notes zero %, 2007. $ 3,206,250
Short-Term Investments (8.9%)(a)
Principal Amount Value
$10,000,000 Ford Motor Credit Co. 3.32s,
January 21, 1994 $ 9,981,556
10,000,000 Merrill Lynch & Co. Inc. 3.35s,
January 7, 1994 9,994,417
4,150,000 Preferred Receivables
Funding Corp. 3.25s,
January 10, 1994 4,136,394
5,000,000 USAA Capital Corp. 3.18s,
February 3, 1994 4,985,425
30,723,000 Interest in $402,391,000
joint repurchase agreement
dated December 31, 1993
with Kidder Peabody & Co.
Inc., due January 3, 1994
with respect to various U.S.
Treasury obligations--maturity
value of $30,725,688 for an
effective yield of 3.15% 30,725,688
Total Short-Term Investments
(cost $59,823,480) $ 59,823,480
Total Investments
(cost $519,493,722)(d) $676,426,833
Notes
(a) Percentages indicated are based on total net assets of
$676,045,810, which correspond to a net asset value per Class A
share and Class B share of $24.66 and $24.53, respectively.
(b) Non-income-producing security.
(c) Securities whose values are determined or significantly
influenced by trading on exchanges not in the United States or
Canada. ADR after the name of a foreign holding stands for
American Depository Receipt, representing foreign securities on
deposit with a domestic custodian bank.
(d) The aggregate identified cost on a tax basis is $519,829,906,
resulting in gross unrealized appreciation and depreciation of
$168,739,509 and $12,142,582, respectively, or net unrealized
appreciation of $156,596,927.
<PAGE>
<TABLE>
<CAPTION>
Statement of
assets and liabilities
December 31, 1993 (Unaudited)
<S> <C> <C>
Assets
Investments in securities, at value
(identified cost $519,493,722) (Note 1) $676,426,833
Cash 903
Dividends receivable 86,137
Receivable for shares of the Fund sold 10,087,500
Receivable for securities sold 8,779,566
Unamortized organization expenses (Note 1) 13,735
Total assets 695,394,674
Liabilities
Payable for securities purchased $15,978,133
Payable for shares of the Fund repurchased 1,795,668
Distributions payable to shareholders 10,343
Payable for compensation of Manager (Note 2) 991,249
Payable for distribution fees (Note 2) 400,717
Payable for administrative services (Note 2) 2,886
Payable for compensation of Trustees (Note 2) 899
Payable for investor servicing and custodian fees
(Note 2) 41,410
Payable for organization expenses (Note 1) 23,788
Other accrued expenses 103,771
Total liabilities 19,348,864
Net assets $676,045,810
<PAGE>
Represented by
Paid-in capital (Note 4 and 5) $515,000,656
Accumulated net investment loss (2,351,707)
Accumulated net realized gain on investment transactions 6,463,750
Net unrealized appreciation of investments 156,933,111
Total -- Representing net assets applicable to capital shares outstanding $676,045,810
Computation of net asset value and offering price
Net asset value and redemption price per Class A share
($531,555,018 divided by 21,552,233 shares) $24.66
Offering price per Class A share (100/94.25 of $24.66)* $26.16
Net asset value and redemption price per Class B share
($144,490,792 divided by 5,891,298 shares)** $24.53
*On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales the offering price is reduced.
**Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
Six months ended December 31, 1993 (Unaudited)
<S> <C> <C>
Investment income
Interest $ 385,583
Dividends (net of foreign tax of $2,831) 228,117
Total investment income 613,700
Compensation of Manager (Note 2) $1,675,021
Investor servicing and custodian fees (Note 2) 267,431
Administrative services (Note 2) 5,624
Compensation of Trustees (Note 2) 9,934
Distribution fee -- Class A (Note 2) 519,863
Distribution fee -- Class B (Note 2) 309,665
Reports to shareholders 24,322
Auditing 10,992
Legal 6,284
Postage 40,110
Amortization of organization expenses (Note 1) 5,991
Other 90,170
Total expenses 2,965,407
Net investment loss (2,351,707)
Net realized gain on investments (Notes 1 and 3) 14,226,082
Net unrealized appreciation of investments during the period 73,534,977
Net gain on investments 87,761,059
Net increase in net assets resulting from operations $85,409,352
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
changes in net assets
<S> <C> <C>
Six months ended Year ended
December 31 June 30
1993* 1992
Increase in net assets
Operations:
Net investment loss $ (2,351,707) $ (2,175,729)
Net realized gain on investments 14,226,082 3,536,111
Net unrealized appreciation of investments 73,534,977 80,388,469
Net increase in net assets resulting from
operations 85,409,352 81,748,851
Distributions to shareholders from
net realized gain on investments -- Class A (8,898,213)(3,728,798)
net realized gain on investments -- Class B (2,205,357) --
Increase from capital share transactions (Notes 4) 267,616,032114,897,684
Total increase in net assets 341,921,814 192,917,737
Net assets
Beginning of period 334,123,996 141,206,259
End of period (including accumulated net investment loss of
$2,351,707 and $2,644,703, respectively) $676,045,810 $334,123,996
*Unaudited
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial highlights*
(For a share outstanding
throughout the period)
For the period
March 1, 1993 August 31, 1990
Six months (commencement Six months (commencement
ended of operations) to ended Year ended of operations) to
December 31 June 30 December 31 June 30 June 30
1993** 1993 1993** 1993 1992 1991
Class B Class A
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $20.80 $17.76 $20.83 $14.50 $11.56 $8.54
Investment operations
Net Investment Loss (.04) (.05) (.04) (.12) (.02) (.11)(a)
Net Realized and Unrealized
Gain on Investments 4.22 3.09 4.32 6.77 3.33(d) 3.19
Total from
Investment Operations 4.18 3.04 4.28 6.65 3.31 3.08
Less distributions from net
realized gain on investments (.45) -- (.45) (.32) (.37) (.06)
Total Distributions (.45) -- (.45) (.32) (.37) (.06)
Net Asset Value,
End of Period $24.53 $20.80 $24.66 $20.83 $14.50 $11.56
Total Investment Return
at Net Asset Value (%) (e) 40.28(b) 51.88(b) 41.18(b) 46.12 28.85 43.12(b)
Net Assets,
End of Period
(in thousands) $144,491 $15,698 $531,555 $318,426 $141,206 $3,164
Ratio of Expenses to Average
Net Assets (%) 1.89(b) 2.02(b) 1.65(b) 1.31 1.64 2.75(a)(b)
Ratio of Net Investment Loss to
Average Net Assets (%) (2.28)(b) (1.72)(b) (1.28)(b) (0.98) (.91) (1.37)(a)(b)
Portfolio Turnover (%) 31.36(f) 93.59 31.36(f) 93.59 116.04(c) 71.54(f)
*Financial Highlights for periods ended through June 30, 1992 have been restated to conform with requirements issued by
the SEC in April 1993.
**Unaudited.
(a)Reflects a voluntary absorption of expenses incurred by the Fund and an expense limitation during the period. As a
result of these limitations, expenses of the Fund for the period ended June 30, 1991 reflect a reduction of $0.05 per
share, respectively.
(b)Annualized.
(c)Portfolio turnover excludes the impact of assets received from the acquisition of Putnam Information Sciences Trust.
(See Note 5)
(d)The amount shown is a balancing figure and does not accord with the net loss on investments which excludes the
unrealized appreciation acquired from Putnam Information Sciences Trust. (Note 5)
(e)Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(f)Not annualized.
/TABLE
<PAGE>
Notes to
Financial statements
December 31, 1993 (Unaudited)
Note 1 Significant accounting policies
The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment
company. The Fund seeks capital appreciation by investing
principally in common stocks of companies in sectors of the
economy which, in Putnam Investment Management's judgment,
possess above-average, long-term growth potential.
The Fund offers both Class A and Class B shares. The Fund
commenced its public offering of Class B shares on March 1, 1993.
Class A shares are sold with a front-end sales charge of 5.75%.
Class B shares do not pay a front-end sales charge, but pay a
higher ongoing distribution fee than Class A shares and are
subject to a contingent deferred sales charge if those shares are
redeemed within six years of purchase. In addition, the Trustees
declare separate dividends on each class of shares. Each class
bears expenses unique to that class (including the distribution
fees applicable to such class), and votes as a class only with
respect to its own distribution plan or other matters on which a
class vote is required by law to be determined by the Trustees,
all other expenses of the Fund are borne pro-rata by the holders
of both classes of shares. Shares of each class would receive
their pro rata share of the net assets of the Fund if the Fund
were liquidated.
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with
generally accepted accounting principles.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined
using the last reported sale price, or, if no sales are reported
- -- as in the case of some securities traded over-the-counter --
the last reported bid price, except that certain U.S. government
obligations are stated at the mean between the last reported bid
and asked prices. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost which
approximates market, and other investments are stated at fair
value following procedures approved by the Trustees.
B) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order
to buy or sell is executed). Interest income is recorded on the
accrual basis and dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date.
C) Joint trading account Pursuant to an exemptive order issued by
the Securities and Exchange Commission, the Fund may transfer
uninvested cash balances into a joint trading account, along with
the cash of other registered investment companies managed by
Putnam Investment Management, Inc. (formerly known as The Putnam
Management Company, Inc.), the Fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc. (formerly known as The
Putnam Companies, Inc.), and certain other accounts. These
balances may be invested in one or more repurchase agreements
and/or short-term money market instruments.
D) Repurchase agreements The Fund, through its custodian,
receives delivery of the underlying securities, the market value
of which at the time of purchase is required to be in an amount
at least equal to the resale price, including accrued interest.
The Fund's Manager is responsible for determining that the value
of these underlying securities is at all times at least equal to
the resale price, including accrued interest.
E) Federal taxes It is the policy of the Fund to distribute all
of its income within the prescribed time and otherwise comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies. It is also the intention of the
Fund to distribute an amount sufficient to avoid imposition of
any excise tax under Section 4982 of the Internal Revenue Code of
1986. Therefore, no provision has been made for federal taxes on
income, capital gains or unrealized appreciation of securities
held, and excise tax on income and capital gains.
F) Distributions to shareholders Distributions to shareholders
are recorded by the Fund on the ex-dividend date.
G) Unamortized organization expenses Expenses incurred by the
Fund in connection with its organization, its registration with
the Securities Exchange Commission and with various state and the
initial public offering of its shares aggregated $54,369. These
expenses are being amortized by the Fund on a straight-line basis
over a five-year period.
Note 2 Management fee, administrative services, and other
transactions
Compensation of Putnam Investment Management, the Fund's Manager,
a wholly-owned subsidiary of Putnam Investments, Inc., for
management and investment advisory services is paid quarterly
based on the average net assets of the Fund. Such fee is based on
the following annual rates: 0.70% of the first $500 million of
average net assets, 0.60% of the next $500 million, 0.55% of the
next $500 million, and 0.50% of any amount over $1.5 billion,
subject to reduction in any year by the amount of certain
brokerage commissions and fees (less expenses) received by
affiliates of the Manager of the Fund's portfolio transactions.
The Fund also reimburses the Manager for the compensation and
related expenses of certain officers of the Fund and their staff
who provide administrative services to the Fund. The aggregate
amount of all such reimbursements is determined annually by the
Trustees. For the six months ended December 31, 1993, the Fund
incurred $5,624 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,440
and an additional fee for each Trustees' meeting attended.
Trustees who are not interested persons of the Manager and who
serve on committees of the Trustees receive additional fees for
attendance at certain committee meetings.
Custodial functions for the Fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided
by Putnam Investor Services, a division of PFTC. Fees paid for
these investor servicing and custodial functions for the six
months ended December 31, 1993 amounted to $267,431.
Investor servicing and custodian fees reported in the Statement
of operations for the six months ended December 31, 1993 have
been reduced by credits allowed by PFTC.
The Fund has adopted a distribution plan with respect to its
class A shares (the "Class A Plan") pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Class A
Plan is to compensate Putnam Mutual Funds Corp. (formerly known
as Putnam Financial Services, Inc.), a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses
incurred by it in distributing class A shares. The Trustees have
approved payment by the Fund to Putnam Mutual Funds Corp. at an
annual rate of 0.25% of the average net assets attributable to
class A shares. For the period ended December 31, 1993, the Fund
paid $519,863 in distribution fees for class A shares.
The Fund has adopted a separate distribution plan with respect to
its class B shares (the "Class B Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The purpose of the
Class B Plan is to compensate Putnam Mutual Funds Corp. for
services provided and expenses incurred by it in distributing
class B shares. The Class B Plan provides for payments by the
Fund to Putnam Mutual Funds Corp. at an annual rate of 1.00% of
the Fund's average net assets attributable to class B shares. For
the six months ended December 31, 1993, the Fund paid Putnam
Mutual Funds Corp. distribution fees of $309,665 for class B
shares.
During the six months ended December 31, 1993, Putnam Mutual
Funds Corp., a wholly owned subsidiary of The Putnam Companies,
Inc., acting as an underwriter, received net commissions of
$395,367 from the sale of Class A shares of the Fund.
Putnam Mutual Funds Corp. also receives the proceeds of the
contingent deferred sales charges on its Class B share
redemptions. Putnam Mutual Funds Corp. has informed the Fund that
it received contingent deferred sales charges of $65,509 from
redemptions during the six months ended December 31, 1993.
A deferred sales charge of up to 1% is assessed on certain
redemptions of Class A shares repurchased as part of an
investment of $1 million or more. For the period ended December
31, 1993, Putnam Mutual Funds Corp., acting as underwriter,
received $18 on such redemptions.
Note 3 Purchases and sales of securities
During the six months ended December 31, 1993, purchases and
sales of investment securities other than short-term investments
aggregated $362,849,776 and $141,269,693, respectively.
There were no purchases or sales of U.S. government obligations
during the year. In determining the net gain or loss on
securities sold, the cost of securities has been determined on
the identified cost basis.
<PAGE>
<TABLE>
<CAPTION>
Note 4 Capital shares
At December 31, 1993, there was an unlimited number of shares of beneficial interest
authorized. Transactions in capital shares were as follows:
<S> <C> <C> <C> <C>
Six months ended Year ended
December 31 June 30
1993 1993
Shares Amount Shares Amount
Class A
Shares sold 13,784,604 $321,618,033 15,622,166 $282,584,004
Reinvestment of distributions 333,472 8,016,624 180,756 3,313,941
14,118,076 329,634,657 15,802,922 285,897,945
Shares repurchased (7,851,725) (183,138,289) (10,253,778) (185,483,706)
Net increase 6,266,351 $146,496,368 5,549,144 $100,414,239
For the period
March 1, 1993
(commencement of
Six months ended operations) to
December 31 June 30
1993 1993
Shares Amount Shares Amount
Class B
Shares sold 5,586,061 $131,677,002 780,431 $14,991,747
Reinvestment of distributions 84,413 2,019,170 -- --
5,670,474 133,696,172 780,431 14,991,747
Shares repurchased (533,835) (12,576,508) (25,772) (508,302)
Net Increase 5,136,639 $121,119,664 754,659 $14,483,445
/TABLE
<PAGE>
Note 5 Acquisition of Putnam Information Sciences Trust
On March 23, 1992, the exchange date, the Fund acquired the net
assets of Putnam Information Sciences Trust (PIST) by a tax-free
exchange approved by the shareholders of PIST.
The net assets of the Fund immediately following the acquisition
on March 23, 1992, were $148,015,840.
PIST
Net assets of PIST on March 20, 1992,
valuation date (including unrealized
appreciation of $21,305,019) $101,174,780
Shares of the Fund exchanged in the acquisition
for 5,615,045 outstanding shares of PIST 6,113,280
Note 6 Reclassification of Capital Account
Effective July 1, 1993, Putnam New Opportunities Fund has adopted
the provisions of Statement of Position 93-2 "Determination,
DIsclosure and FInancial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment
Companies (SOP)." The purpose of this SOP is to report the
accumulated net investment income (loss) and accumulated net
realized gain (loss) accounts in such a manner as to approximate
amounts available for future distributions (or to offset future
realized capital gains) and to achieve uniformity in the
presentation of distributions by investment companies.
As a result of the SOP, the Fund has reclassified $2,644,703 to
increase undistributed net investment income and decreased
accumulated net realized gain by $7,424, with an decrease of
$2,637,279 to additional paid-in capital. These adjustments
represent the cumulative amounts necessary to report these
balances through June 30, 1993, the close of the Fund's most
recent fiscal year-end, for financial reporting and tax purposes.
<PAGE>
Fund
performance
supplement
Putnam New Opportunities Fund is a portfolio managed for
long-term capital appreciation through common stocks of companies
in sectors of the economy which, in Putnam Management's judgment,
possess above-average long-term growth potential.
The NASDAQ Industrial Index is an unmanaged index of common
stocks traded in the over-the-counter market. The index does not
take into account brokerage commissions or other costs. Standard
& Poor's 500 Index is an unmanaged list of large-capitalization
common stocks; it assumes reinvestment of all distributions. The
index does not take into account brokerage commissions or other
costs. The fund's portfolio contains securities that do not match
those in the indexes. The Lipper Growth Fund Index is a
NAV-weighted index which represents the 30 largest growth funds
tracked by Lipper Analytical Services for the 12 months ended
December 31, 1993 and since the fund's inception on 8/31/90.
Lipper rankings vary over time and do not reflect the effect of
sales charges.
Fund performance data do not take into account any adjustment for
taxes that may have been payable.
The fund performance supplement has been prepared by Putnam
Management to provide additional information about the fund and
the indexes used for performance comparisons. The information is
not part of the portfolio of investments owned or the financial
statements.
<PAGE>
Putnam
New Opportunities Fund
Fund information
Investment manager
Putnam Investment Management
One Post Office Square
Boston, MA 02109
Marketing services
Putnam Mutual Funds
One Post Office Square
Boston, MA 02109
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
(DALBAR logo)
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
45/71-10470<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Matthew A. Weatherbie
Vice President
Daniel L. Miller
Vice President and
Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul O'Neil
Vice President
John D. Hughes
Vice President
and Treasurer
Beverly Marcus
Clerk and
Assistant Treasurer
Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Hans H. Estin, John A. Hill,
Elizabeth T. Kennan, Lawrence J. Lasser,
Robert E. Patterson, Donald S. Perkins,
George Putnam, III, A.J.C. Smith,
W. Nicholas Thorndike
This report is for the information
of shareholders of Putnam New
Opportunities Fund. It may also be
used as sales literature when preceded
or accompanied by the current
prospectus, which gives details of
sales charges, investment objectives
and operating policies of the fund.
- ----------------------
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
- ----------------------
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) Headers (e.g, the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
